Korea GM Labor-Management Conflict Raises Supplier Concerns: "Delays in Wage Negotiations Threaten Supplier Bankruptcy"

[Asia Economy Reporter Suyeon Woo] As labor and management at Korea GM face difficulties in this year's wage and collective bargaining negotiations, partner companies are expressing a sense of crisis. They are concerned that if a strike by the finished car manufacturer is added to the situation, which has not yet recovered from the shock of the novel coronavirus disease (COVID-19), partner companies will inevitably face the risk of bankruptcy.

On the 28th, the Korea GM Partners Association stated, "If the Korea GM wage and collective bargaining issue is not resolved early, partner companies with weak liquidity may face the worst-case scenario of bankruptcy," emphasizing, "Considering the current situation of partner companies, even a one- or two-day production stoppage must not occur."

This year, due to COVID-19, Korea GM's production plan for the first half of the year was reduced by 30%, and first- and second-tier partner companies are already experiencing liquidity crises. Although the government announced liquidity measures to support parts suppliers, these remain out of reach for Korea GM partner companies with uncertain future sales and low credit ratings. As of last year, Korea GM had 2,976 partner companies employing 130,000 people.

The Partners Association reported, "Support does not reach the companies that actually need funds, so most companies have given up on receiving financial support," adding, "They are barely holding on by raising funds on their own, but the situation is very unstable."

Korea GM labor and management held the 20th main negotiation session the day before but ended in failure after only confirming differences in positions. Since the 23rd, the Korea GM union has been refusing overtime and extra work, effectively conducting a partial strike. Having already secured a legal right to strike, the union plans to gradually escalate the strike depending on the progress of negotiations.

As the wage and collective bargaining negotiations prolong, the ones truly suffering are the partner companies. They worry that the deadlock in negotiations could lead to a full-scale strike by the union. The Partners Association said, "We have invested heavily in manpower and resources according to Korea GM's production plan for the second half of the year, but additional losses following the first half's losses are inevitable," adding, "More companies will become unable to continue operations."

Furthermore, the Partners Association urged, "Please do your best to gather all wisdom and reach an agreement as soon as possible," and pleaded, "Please prevent any further stoppage of the finished car production line."

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