Korea GM Labor Agreement Provisionally Reached... Can Car Labor Negotiations End Within This Month?

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] As the prolonged COVID-19 pandemic heightens the sense of crisis in the global automotive industry, there are signs of progress in the stalled labor-management negotiations of domestic automakers. After a long tug-of-war over last year's wage negotiations, Korea GM has reached a tentative agreement, and Renault Samsung Motors' labor and management are also reported to have made significant progress in narrowing their differences. Industry insiders are hopeful that Renault Samsung's labor and management could finalize an agreement as early as this month.

Korea GM's labor and management announced on the 26th that they had reached a "2019 Wage Negotiation Tentative Agreement" after about nine months of negotiations. The tentative agreement includes additional discount benefits ranging from 1 million to 3 million KRW per person by vehicle model when union members purchase new Korea GM vehicles. Accordingly, union members can receive discount benefits such as 3 million KRW for the Trailblazer, 3 million KRW for the Malibu, and 1 million KRW for the Spark through incentive vouchers provided by the company.

However, the company decided not to implement the basic wage increase, performance bonuses, or lump-sum payments that the union demanded last year. Additionally, separate discussions will be held regarding the lawsuits for damages filed by the company related to strikes.

The Korea GM union plans to conduct a vote among its members on the wage negotiation proposal on the 30th and 31st of this month. If a majority of voters approve the proposal, the wage negotiations will be finalized.

Renault Samsung Motors also resumed wage negotiations on the afternoon of the 24th. Although the parties failed to reach an agreement during the talks, they reportedly narrowed their differences significantly on key issues. Renault Samsung's labor and management are continuing discussions on the introduction of a contribution allowance and a 2 million KRW compensation payment for freezing the basic wage. Initially, the parties were at an impasse over the basic wage increase proposal, but as the focus of discussions shifted, the path to an agreement opened.

Industry insiders believe that after prolonged negotiations, both labor and management have reached a consensus to overcome the crisis brought on by COVID-19 first. An industry official said, "Both companies are at the early stage of launching new vehicles that are crucial to their survival, and both labor and management share the recognition that the global automotive industry is facing its worst crisis due to COVID-19. Since labor and management have made significant progress in wage negotiations, there is hope that conflicts could be resolved as early as this month."

This content was produced with the assistance of AI translation services.