February 21, 2018 / 6:44 AM / a month ago

Union says it will strike if GM plans full South Korea exit

SEOUL (Reuters) - General Motors’ (GM.N) South Korean workers will go on a full strike if the U.S. automaker decides to completely pull out of the country, its union head told Reuters on Wednesday, adding he does not rule out the possibility GM might leave.

The main gate to GM Korea's Gunsan factory is seen in Gunsan, South Korea February 13, 2018. Picture taken February 13, 2018. Yonhap via REUTERS

For now, the 14,000-member union will focus on putting pressure on GM to come up with a concrete turnaround plan for its loss-making South Korean operations, Lim Han-taek, said in an interview.

GM announced last week it would shut its plant in the city of Gunsan, in southwest South Korea, by May and decide the future of the remaining three plants in the country within weeks.

GM has said it should make “meaningful progress” with stakeholders such as the labor union and the government by the end of February, when it will make “important decisions” on its next steps.

Lim said GM’s international operations head, Barry Engle, expressed hopes of wrapping up this year’s annual wage talks as soon as possible during a meeting earlier on Wednesday. But Lim said it will be difficult to resume contract negotiations by mid-March because its umbrella union has to come up with its demands first.

“The union will make some concessions, if needed, and the government will provide financial support to GM only if it presents a thorough turnaround plan,” he said.

GM has proposed a debt-for-equity swap and fresh investment in its South Korea unit as part of a plan to get financial support and tax benefits from Seoul, officials and sources have said. The South Korean government wants an audit on the company and its “opaque management” before any aid is approved.

Lim said the union will discuss a full strike and other options at a meeting tomorrow.

    “We don’t want to go as far as a full strike,” he said, citing negative public views of South Korea’s auto unions.

    “But if GM says it will completely withdraw from South Korea, we will down our tools. This will be over. When GM left other markets, they did so boldly. I hope that does not happen in South Korea.”

    GM’s Engle has said it will produce two new models in South Korea, but Lim said that would still fall short of turning around GM’s operations in the country.

    Lim said it will take four years for one of the models, which is a crossover, to begin production. Another model, the next-generation Trax SUV which is due early 2020, will not be able to revive factory utilization rates by itself.

    Reporting by Hyunjoo Jin; Editing by Lincoln Feast

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