Korea GM Reconsiders 210 Billion KRW Investment Plan Due to Union Strike

Decision to Postpone Execution of New Investment Costs for Bupyeong Plant Proposed in 19th Negotiation Document

The Korea GM Bupyeong Plant, which stopped operating due to a full-scale strike by the labor union in September last year (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] Korea GM has decided to reconsider its plan for a new investment of $190 million (approximately 210 billion KRW) in the Bupyeong plant. As the wage and collective bargaining negotiations (wage and collective agreement) have reached a deadlock this year and the union continues to strike, the company has taken the strong measure of suspending the investment.

On the 6th, Korea GM announced, "We will suspend and reconsider the expenditure related to the planned investment in the Bupyeong plant for the production of next-generation global new products." Earlier, at the 19th negotiation held on the 22nd of last month, Korea GM had presented a proposal including an investment of $190 million in production facilities at Bupyeong Plant 1. ▶Related article page 11

The background for Korea GM's announcement to reconsider the existing investment plan within just half a month lies in liquidity issues. Korea GM has already experienced a serious cash liquidity crisis due to production disruptions exceeding 60,000 units in the first half of this year caused by COVID-19 and other factors. In response, the company has been making every effort to secure liquidity through active cost-cutting measures such as reducing executive salaries.

Amid this crisis, since the end of last month, the union has continued to refuse overtime and special work and carried out partial strikes, adding to production losses. After the union held a Central Dispute Countermeasures Committee meeting yesterday and announced additional partial strikes for three days on the 6th, 9th, and 10th of this month, Korea GM estimates that the cumulative production loss caused by the union's industrial actions during this year's wage and collective bargaining negotiations will reach 12,000 units.

A Korea GM official said, "This decision was made based on the judgment that additional investment is impossible if the liquidity crisis worsens due to further production losses," adding, "Currently, the company has presented a proposal containing the maximum amount it can offer and is awaiting continuous discussions."

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