Final Inspection

Talks No Usual Throwdown for GM Korea, Union in 2015

RSS

Table of Contents:

Employees’ specialized skills make GM Korea’s new-vehicle and engine-development centers valuable assets. Line workers, however, differ mainly from their Indian, Mexican and Chinese counterparts in that they make a lot more money.

Union negotiators wear scarlet headbands during bargaining sessions with Korean automakers.

This in-your-face posturing by representatives of the Korean Metal Workers Union has two purposes: to put the car companies on notice they’re ready to fight, and to assure the fractious rank-and-file they’re ready to fight.

The KMWU this year hopes to replicate the success it had in 2014, when it won substantial increases in wages and bonuses from GM Korea, Renault Samsung, Hyundai-Kia and Ssangyong without staging the strikes that usually accompany annual contract negotiations. Auto workers have staged partial or full-blown walkouts, some marked by violent confrontations with police, almost yearly since the mid-1990s.

GM Korea unexpectedly caved in last year to the union’s demand that it include fixed bonuses in calculating basic wages. The concession raised payouts for overtime and holiday work, severance packages at retirement and other compensation. For years Korean automakers had paid bonuses counted separately from regular wages, saving billions of dollars in labor expenses.

GM Korea CEO Sergio Rocha, a one-time line worker who personally participates in the talks, warned then the spike in costs would make not only his company but all Korean automakers less competitive. That followed then-GM CEO Dan Akerson’s complaint in 2013 that Korean auto workers’ wages were “too high.”

The average GM Korea worker’s wage in 2014 was $20,940 (within shouting distance of what a second-tier UAW member in the U.S. is paid, factoring in the strong won), but that base pay is inflated by bonuses ranging from $3,000 to $4,500 depending on seniority, profit sharing and other perks such as “family allowances.”

The KMWU last year came away with what it wanted, particularly Rocha’s agreement rolling bonuses into wage calculations – a demand Hyundai and Kia had strongly opposed.  Rocha also promised to retain Chevrolet Cruze production for GM Korea, but parent GM announced in March the new-generation Cruze would be built starting in 2017 in Coahiula, Mexico. GM Korea will stop building the current Cruze at the end of next year.

Please or Register to post comments.

What's Final Inspection?

WardsAuto editors share insights and observations on the global auto industry.

Contributors

David E. Zoia

As Editorial Director, I oversee much of what goes into WardsAuto.com, enjoying a ringside seat that lets me observe up close just about every facet of the industry worldwide. I have covered the...

James M. Amend

James Amend is an associate editor at WardsAuto.com, covering day-to-day business and product news at General Motors. He also leads coverage of regulatory and environmental issues, as well as the...
Blog Archive
Follow Us

Sponsored Introduction Continue on to (or wait seconds) ×