South Korea union says GM plant closure move is 'death sentence'

SEOUL - 14 February 2018: Workers at a General Motors (GM) plant in South Korea that the U.S. automaker plans to close staged a protest on Wednesday, calling the decision a “death sentence” and threatening a strike.

GM announced on Tuesday it will shutter the plant in Gunsan, in South Korea’s southwest, by May and decide within weeks on the fate of the remaining three plants in the country.

Unionized workers at the Gunsan plant, which employs 2,000 out of GM’s 16,000-strong South Korean workforce, wore red headbands saying “Solidarity, Fight” and held leaflets demanding the withdrawal of the closure plan, pictures from local media show.

The union will establish a detailed plan in protest against the shutdown move that could include a possible strike and holding of a sit-in rally at the headquarters of GM Korea, GM’s local arm, 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 phone.

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

Dang said about 1,200 unionized workers from GM Korea joined the protest at the Gunsan factory, a day before the Asian country begins lunar new year holidays.

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.

After Trump took office, trade tensions rose between Washington and its key ally South Korea, with their bilateral free trade deal now under renegotiation.

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

South Korea’s trade ministry said on Wednesday it will also take a dispute to WTO against the United States for imposing high anti-dumping duties on South Korean steel and transformers.

WAGES, PRODUCTIVITY IN FOCUS

As the U.S. car maker is seeking to revamp its loss-making Korea operation, GM executives have complained about South Korea’s relatively high wages and its strike-prone labor union.

But Dang of GM Korea’s union blamed the company for reducing output, saying lower wages were not acceptable.

GM’s move is the latest in a series of its steps to put profitability and innovation ahead of sales and volume. Since 2015 GM has exited unprofitable markets including Europe, Australia, South Africa and Russia.

A GM Korea official said GM launched on Tuesday a voluntary retirement plan for all its workers in South Korea.

GM’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 labor 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.