Almost 2,500 GM Korea workers apply for voluntary redundancy package

Almost 2,500 GM Korea workers apply for voluntary redundancy package
General Motors Korea's labour union members protest, while demanding that GM withdraw a plan to shut down a plant, in Seoul, South Korea February 28, 2018.
PHOTO: Reuters

SEOUL - Almost 2,500 workers at General Motors' South Korean unit, equivalent to 15 per cent of its staff, have applied for a redundancy package that the US automaker is offering as part of a drastic restructuring, union officials said.

GM shocked South Korea last month when it said it was closing down one plant and would decide on the fate of three others in the coming weeks - decisions that hang on potential financial support from Seoul and the amount of concessions it can gain from unions.

At the Gunsan factory which is due to be shut down, 941 out of some 2,000 workers applied for the redundancy package, the officials said, declining to be identified as the information has not been publicly released. GM Korea declined to comment.

A GM document seen by Reuters showed that over the longer-term, the US automaker aims to cut 5,000 South Korean jobs but keep production steady if Seoul agrees to its US$2.8 billion (S$3.7 billion) proposal for the loss-making operation.

Under the redundancy package, which had an application deadline of March 2, workers are being offered three times their annual base salary, money for college tuition and more than US$9,000 towards a new car.

GM Korea plans to hold another round of talks with the union on Wednesday where the two sides may discuss the fate of the workers at the Gunsan plant who did not apply for the package as well as the automaker's proposals on wages.

The union is under much pressure to make concessions. South Korea's auto association added its voice on Friday, arguing that workers' wages at GM were high.

"We should not miss the golden time for labour reform," the Korea Automobile Manufacturers Association said in a statement.

The South Korean government is expected to start due diligence on GM Korea this week as it weighs whether to spend taxpayers' money to rescue the unit.

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