GM requests S. Korean government to persuade local workers

General Motors Co. (GM) has reportedly requested that the South Korean government persuade the local workers to share the pain of the company by agreeing to a wage freeze. It seems that the Detroit-based carmaker intends to widen internal conflicts within Korea over the current circumstances and minimize its own responsibility by getting the government involved in the negotiation with GM Korea.

The Korea Development Bank (KDB) and related government ministries said Sunday that Barry Engle, GM executive vice president and president of GM International, made a request to the government to convince the local labor union while agreeing on the three preconditions for financial support. In meetings with Lee Dong-geol, Chief Executive Officer of KDB, and Lee In-ho, Vice Minister of Trade, Industry and Energy, Engle stressed that the cutting down of labor costs is essential for the survival of GM Korea and demanded support from the government in wage and group negotiations with the labor union.

GM had planned to finalize the negotiation with the labor union of its South Korean unit by the end of this month ahead of allocating new models to Korean plants scheduled for early March, but the negotiation has reached a deadlock as Korea’s labor union refused to accept the proposal.

If the Korean government decides to intervene, the negotiation is likely to develop into a political issue. Some politicians and local autonomous entities have already called upon the government to play its role. One government official expressed discontent, saying, “GM appears to be shifting its own responsibility as an employer to the government.”


Gun-Huk Lee gun@donga.com · Yoo-Hyun Kang yhkang@donga.com