Union Overtime Refusal Could Cost GM Korea 3,500 Vehicles a Week

Unionized workers at GM Korea plan to launch a strict policy of refusing to work weekday overtime and weekends at the same time they put down their tools for a 3-hour strike on each of two shifts July 4.

The combined labor actions are meant to pressure management into accepting union demands during current contract negotiations. The union threatened the partial strikes last month if management failed to produce what it considered a substantive proposal.

“The union has issued a directive to refuse weekday overtime work and weekend work starting from July 4 until the 2013 wage negotiation is concluded,” an informed source tells WardsAuto.

“Refusal of holiday and overtime work is considered to be industrial action,” he says. “Overtime work cannot be provided in any way until the union cancels the directive.”

The impact of refusing to work weekday overtime is seen as more serious than the weekend- work refusal, he says.

Except for the Gunsan plant, both Plant 1 and Plant 2 at Bupyeong and the Spark assembly plant at Changwon routinely schedule four hours of overtime on a daily basis. On a 2-shift basis, that means GM Korea stands to lose 12 hours of production every day.

Weekend work varies according to demand for various models. Plant 1 at Bupyeong, which produces the Chevrolet Aveo small car and Chevy Traxx, Buick Encore and Opel Mokka cross/utility vehicles, has worked weekends consistently, missing just one Sunday since the new subcompact CUVs went into production.

The Gunsan factory, which builds the Chevy Cruze, has not scheduled weekend work in the past six months.

When weekend work is scheduled at a plant, the number of hours and type of shift also fluctuate, depending on demand, the source says. At GM Korea, weekend schedules range from one 8-hour shift on Saturday to a maximum of two consecutive 10-hour Saturday shifts as well as 8 hours on Sunday.

Analysts estimate GM Korea’s weekday production loss at roughly 500 vehicles daily, or 2,500 weekly. The weekend-work refusal at Plant 1 is estimated to cost up to 1,000 units of lost production weekly. The facility currently is operating on a sped-up 60-units-per-hour, 2-shift basis and has hired extra workers to handle the higher demand.

While Plant 1 and Changwon are running at or near capacity, the overtime-work refusal comes as demand is slack for models produced at Plant 2 and Gunsan.

GM Korea in June saw declines in all four of its sales categories, according to WardsAutodata. Global deliveries of completely built-up vehicles were down 10% from year-ago to 70,237 units. Domestic sales were off 25% to 10,161, while CBU exports fell 6.8% to 60,076. Complete- knocked-down exports tumbled 15.1% to 114,861.