Korea GM Proposes Extending Labor Agreement Cycle to 2 Years... Union Declares "Negotiations Breakdown"

Korea GM Delivers First Proposal Including 2 Years of Base and Performance Bonuses
Union: "Violates Metalworkers Union Rules... Proposal Below Common Sense, Unacceptable"

Last September, the quiet Korea GM Bupyeong plant due to a union strike (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] Korea GM has delivered a proposal to the union in this year's wage and collective bargaining agreement (CBA) negotiations, suggesting that the annual wage negotiations be conducted every two years. In response, the union strongly opposed the proposal and declared the breakdown of negotiations.

According to industry sources on the 11th, Korea GM management presented the first proposal including this content at the 12th negotiation session held the previous day. The management stated, "Unstable negotiations become an obstacle to future investment execution," and added, "Through stabilizing labor-management relations, we can expect the normalization of company management. In this context, we are submitting a proposal that includes wages for 2020 and 2021."

The management explained that they considered the uncertainties caused by the COVID-19 pandemic. They recognized the current crisis situation and proposed reaching an agreement on wages, performance bonuses, and CBA negotiations covering the entire two-year CBA period.

The first proposal from management included a plan to increase the basic monthly wage by 22,000 KRW for production workers and by the amount of seniority-based pay raise for office workers next year. They also stated that the basic wage has already been increased this year through the seniority-based pay raise. Furthermore, if next year's consumer price index falls below the seniority-based pay raise, the 2022 wage negotiations will consider this and negotiate the seniority-based pay raise between labor and management.

Regarding performance bonuses, they proposed paying 1.7 million KRW in January next year based on last year's performance, and 2 million KRW in August next year based on this year's performance. Additionally, if the company achieves the break-even point this year, they plan to pay an extra 1 million KRW.

The union strongly opposed this management proposal. Kim Seong-gap, head of the Korea GM union branch, pointed out at the negotiation table, "A two-year proposal violates the Metal Workers' Union regulations." He declared the breakdown of negotiations, saying, "We agreed not to mention the 2018 agreement, but the management keeps talking about the consumer price index. The current proposal is below common sense and absolutely unacceptable."

The union also strongly protested, saying, "GM Technical Center Korea (GM TCK) paid performance bonuses reflecting last year's results, but they are explaining based on this year for us," and "The company has achieved its production plan targets, but it discriminates between the production site and office workers."

Through the demands submitted in July, the union is insisting on a basic monthly wage increase of 120,304 KRW this year and performance bonuses of 400% of the ordinary wage plus 6 million KRW. Since the management's current proposal shows a significant gap from the union's demands, difficulties in negotiations are inevitable.

The Korea GM union has already been considering a strike as it failed to narrow the gap in positions during more than ten negotiation sessions held until early this month. After showing an 80% approval rate in a strike vote conducted among all union members on the 1st and 2nd of this month, the union filed a labor dispute mediation request with the Central Labor Relations Commission on the 4th. The commission planned to reach a conclusion by the 14th, but after a family member of the company's negotiation committee tested positive for COVID-19, the union withdrew the dispute mediation request and asked to reapply after the COVID-19 situation calms down.

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