[People人] Kaher Kazem, President of Korea GM with Extended Term, Will He Achieve the Dream of Turning a Profit?

President Kazem Completes 3-Year Term, Enters 'Management Phase 2'
Korea GM Faces Sixth Year of Deficits, Faces Deficit Crisis Again This Year
Labor-Management Conflict and Production Disruption Challenges Must Be Overcome
Expecting President Kazem's Leadership to Break the Vicious Cycle of Labor-Management Conflict

[Asia Economy Reporter Su-yeon Woo] Kaher Kazem, president of Korea GM, who recently extended his term, has come under scrutiny. Over the past three years, he actively communicated with the Korean government and led the management normalization of Korea GM. However, due to the recent deterioration of labor-management relations in his second term, not only has the goal of turning a profit been disrupted, but the 215 billion won investment plan for global new product production is also facing suspension.

According to sources familiar with Korea GM, Kazem, who was appointed CEO of Korea GM in September 2017, recently received a notification from GM's U.S. headquarters about the extension of his term after completing the usual three-year term at the end of August this year. GM headquarters highly evaluated Kazem's management skills, who maintained a friendly relationship with the Korean government and led management normalization, and decided to extend his term.

Kaher Kazem, President of Korea GM

When Kazem first took office in 2017, he was always tagged as a 'restructuring and withdrawal expert.' This was because he had led GM's withdrawal from the Indian domestic market while serving as GM India president just before joining Korea GM.

However, looking at his 25-year career at GM, he is rather close to a production and quality expert. Kazem joined GM Australia in 1995 and held key positions in the production division of GM subsidiary brand Holden. From 2009 to 2012, he served as vice president of production and quality at GM Thailand and the ASEAN region.

Korea GM, which has been in the red for six consecutive years until last year, is betting its life on securing export volumes through production and quality improvement. Cooperation with the labor union is essential to secure volume. As a production expert who knows this better than anyone, Kazem has made considerable efforts to dispel rumors of Korea market withdrawal and to gain the cooperation of the labor union since his appointment.

Recently, he attempted to open a new horizon in labor-management relations by proposing the first-ever two-year cycle wage and collective bargaining negotiations in the domestic automobile industry. However, the strong labor union opposed this and responded with strikes, making it highly likely that Kazem's goal of "turning a profit within his term" will be thwarted again this year.

Kaher Kazem, President of GM Korea, is explaining the management strategy at the new car launch event. Photo by GM Korea

Until early this year, the atmosphere was not bad. Operating losses, which had increased to about 800 billion won annually, were reduced to about 300 billion won last year. With the effects of previous restructuring reflected and the start of U.S. exports of the export-leading model Trailblazer, hopes for turning a profit this year seemed to emerge. However, the unexpected variable of the COVID-19 outbreak caused production losses of more than 60,000 units in the first half of this year, leading to a liquidity crisis. Additionally, during recent wage and collective bargaining negotiations, the union's refusal of overtime and special work, along with partial strikes, caused production disruptions exceeding 10,000 units.

Korea GM is countering by stating that if the union proceeds with the strike, it will fully suspend the 210 billion won new investment in the Bupyeong plant. This can also be understood as a warning from GM headquarters, which is considering withdrawal if stable labor-management relations are not guaranteed. Recently, Kazem reportedly told close aides, "From the U.S. headquarters' perspective, the current situation of Korea GM is incomprehensible," and "If labor conflicts continue, the headquarters may stop the Bupyeong plant."

Entering his fourth year working in Korea this year, Kazem has experienced many hardships in narrowing differences with the union. In 2018, the union illegally occupied offices, forcing him to carry security guards for a while to avoid physical clashes. Recently, he was even indicted for violating the Act on the Protection of Dispatched Workers and faced a travel ban.

Industry attention is focused on what decision Kazem, who has internalized the uniqueness of Korean labor unions through experience, will make in this year's wage and collective bargaining negotiations. The labor and management, having already conducted 24 rounds of negotiations, have struggled to narrow their differences, and the union has raised the level of partial strikes, signaling an all-out struggle. For Korea GM's long-cherished goal of "turning a profit," cooperation from the union is a prerequisite. It is a time when Kazem's wise leadership, which can break the vicious cycle of labor-management confrontation, is highly anticipated.

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