While 15% of employees, 941 of 2,000 workers, have opted for GM Korea’s generous redundacy package, this week Seoul will have to decide on whether it is willing to risk taxpayer’s money to bail out the loss making plant.
Union officials from General Motors’ South Korean unit stated, nearly 15% of employees have opted to the redundancy package offered by the automaker as part of its strategic restructuring.
Last month, General Motors delivered a shock to South Korea with its disclosure that it was closing down one of its plants and would decide on the fate of 3 more in the coming weeks. The pending decisions on the 3 other plants depend on the Seoul’s financial support and concessions gained from unions.
Meanwhile at the Gunsan factory, which is scheduled for closure, 941 out of nearly 2,000 workers have applied for GM’s redundancy package, said officials who preferred the cover of anonymity since the information has yet to be made officially public.
GM Korea declined to comment.
As per an internal document from GM, in the long run the U.S. automaker aims to cut 5,000 jobs in South Korea in order to keep costs down but production steady provided Seoul agrees to its $2.8 billion proposal for the loss-making plant.
Under the redundancy package, which had an application deadline of March 2, employees had been offered three times their annual base salary, plus money for college tuition and more than $9,000 towards a new car.
On Wednesday, GM Korea plans on holding another round of talks with the union in order to decide on the fate of the workers at the Gunsan plant who did not apply for the redundancy package and for GM Korea’s proposals on wages.
Incidentally, the union is under considerable pressure to make concessions. On Friday, South Korea’s auto association weighed in saying the wages of workers’ at GM were high.
“We should not miss the golden time for labor reform,” said the Korea Automobile Manufacturers Association in a statement.
Significantly, during this week, the South Korean government is expected to begin its due diligence on GM Korea as it weighs its options to spend taxpayers’ money to rescue the loss making unit.