GM Korea Seeks to Freeze Union Wages, Trim Benefits

GM Korea is seeking a freeze on current wages and other concessions from its unionized workers as part of its turnaround plan.

An internal company memo also says GM Korea wants subsequent wage increases to not exceed the rate of inflation; elimination of bonuses which last year amounted to roughly $10,000 per worker; and elimination of some special employee benefits such as tuition assistance for workers’ families and special perks for those with high seniority.

The Korea Metal Workers Union, which represents all 16,000 of GM Korea’s hourly employees, did not react publicly to disclosure of the memo.

Meanwhile, government sources announced Feb. 23 they would accept the assignment of an expedited due-diligence report on GM Korea’s operations to the accounting firm of Samil Price Waterhouse. The accounting review had been requested by the Korea Development Bank, which holds a 17% stake in GM Korea, and was agreed to by GM International President Barry Engle.

At a GM Korea board meeting held Friday before Engle left Korea, directors were advised parent General Motors has agreed to extend the deadline for repayment of a 700 billion won ($650 million) loan that was due at the end of this month until the end of March.