GM Korea workers approve strike as wage talks stall

Wed Jul 9, 2014 4:05am EDT
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SEOUL (Reuters) - General Motors' (GM.N: Quote) South Korean workers on Wednesday voted to go on strike over salaries and production volume, signalling tough annual wage talks for automakers already grappling with falling earnings due to the stronger won.

Strikes are an almost annual event in South Korea's $173 billion auto industry, but this year's unrest could be more prolonged than usual as workers are calling for the revamping of a 60-year-old wage scheme among other demands.

A union spokesman said 69 percent of GM Korea's 14,016 workers voted to down tools and walk out for a fourth consecutive year unless they reach a deal.

A union spokesman was not immediately available for comment as representatives were engaged in another round of negotiations with GM Korea management.

A spokesman for GM Korea said the vote did not mean that there will be an actual strike and said it was one of the union's "ordinary actions" during annual negotiations.

"Both sides remain committed to reaching a fair and reasonable labour agreement based on mutual trust and understanding," the spokesman said.

Unions are demanding changes to the wage scheme, which has been in place since 1953, because the country's supreme court ruled late last year that fixed bonuses should be counted as base wages.

Workers want their new contract to comply with the ruling because it would increase various statutory benefits, such as overtime allowances and severance pay, which are adjusted in proportion to base wages.

GM Korea workers are also calling for management to boost production after the U.S. automaker announced plans to stop selling Chevrolet-branded cars in Europe by the end of 2015.   Continued...

Sergio Rocha, president and CEO of GM Korea poses next to Spark EV at the Seoul motor show in Goyang, north of Seoul March 28, 2013.  REUTERS/Lee Jae-Won