You are here

UPDATE 3-S.Korea union says GM plant closure is "death sentence", threatens strike

* GM plans to shut one plant by May, will decide on 3 more
soon

* Offers workers 3 times annual wage, tuition fees for
redundancy

* Trump chimes in on U.S. automaker's move in South Korea
(Recasts with comments from town residents and official)

By Heekyong Yang and Ju-min Park

GUNSAN/SEOUL, Feb 14 (Reuters) - General Motors'
workers at a South Korean plant staged a protest on Wednesday
against its planned closure, calling the move by the U.S.
automaker a "death sentence", and threatening a strike.

In the city of Gunsan, where the factory with 2,000 workers
is, shuttered store fronts and empty streets near the plant are
a stark reminder of the depressing impact on the rural town.

The factory had already been running at about 20 percent of
capacity over the past three years even before the U.S. carmaker
announced the closure.

"Gunsan city worked really hard to rescue GM, buying GM cars
produced from the factory. The whole town is now in panic," Park
Chung-hi, chairwoman of the Gunsan city council, told Reuters.

Park who also has a GM car said one out of five in Gunsan,
including family members of workers at GM's part suppliers,
relies on the U.S. carmaker's operation there.

GM's South Korean unit launched a voluntary redundancy
scheme for its 16,000 workers in the Asian nation after
announcing on Tuesday it will shutter the plant in Gunsan by May
and decide within weeks on the fate of the remaining three
plants in the country.

Unionised workers at the Gunsan plant wore red headbands
saying "Solidarity, Fight" and held leaflets demanding the
withdrawal of the closure plan. Some had shaved their heads.

"Let's protect our right to live on our own," Kim Jae-hong,
the leader of the workers' union at the Gunsan branch, said amid
tears.

GM's planned revamp of its loss-making South Korea
operations is the latest in a series of steps by the automaker
to put profitability and innovation ahead of sales and volume.
Since 2015 GM has exited unprofitable markets including Europe,
Australia, South Africa and Russia.

It is offering South Korean workers three times their annual
base salary, money for college tuition and more than $9,000
towards a new car as part of a redundancy package.

A spokesman of GM Korea, the local unit, said the company
would continue discussions with the union and seek their
understanding over the closure plan.

But workers were far from placated. The union will establish
a detailed plan in protest against the shutdown that may include
a strike and holding of a sit-in rally at the headquarters of GM
Korea, according to the union's Gunsan branch.

"We can't accept this. The company informed us about the
closure plan, not asking for our opinion. It was already the end
of the discussions," Dang Sung-geun, a senior official at the
union of GM Korea, told Reuters by telephone.

"This is like a death sentence notice before the Lunar New
Year holidays."

Dang said about 1,200 unionised workers from GM Korea joined
the protest at the Gunsan factory, a day before the Asian
country begins Lunar New Year holidays. Gunsan is located in the
southwest of the country.

U.S. President Donald Trump on Tuesday used GM's decision to
close the plant to launch fresh criticism of the U.S.-South
Korea trade agreement.

Trump recently approved tariffs on South Korean washing
machines, while South Korea has vowed to take countermeasures
through the World Trade Organization (WTO).

South Korea's trade ministry said it will take a dispute
against the United States to the WTO, involving the imposition
of high anti-dumping duties on South Korean steel and
transformers.

WAGES, PRODUCTIVITY IN FOCUS

GM executives have complained about South Korea's relatively
high wages and its strike-prone labour union. But Dang of GM
Korea's union blamed the company for reducing output, saying
lower wages were not acceptable.

The automaker's restructuring plan places South Korean
President Moon Jae-in in an uncomfortable spot, as he has
pledged more new jobs and job security.

South Korea's strong labour unions have weighed on the
country's automobile industry, which Moon's administration views
as a challenge, a trade ministry official said.

"The South Korean auto industry's high cost and low
productivity has been a deep-rooted issue, which can't be fixed
overnight, but we will try to resolve this issue by building
trust with the unions and the companies," said the official who
asked not to identified.

Locals in Gunsan, the small city with population of about
270,000, say the closure will hit the economy hard, putting many
out of business.

"The economy of the neighbourhood is all dying," said Kim
Heung-sik, a taxi driver whose cousin worked for GM Korea's
subcontractor.
(Reporting by Heekyong Yang, Ju-min Park; Editing by Lincoln
Feast, Muralikumar Anantharaman and David Evans)

© Copyright Thomson Reuters 2018. Click For Restrictions - http://about.reuters.com/fulllegal.asp

Read more about

Talk in Marketing

Most Recent Poll

Do you agree or disagree with President Trump’s negotiating style for trade agreements?