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| Korea Development Bank officials were stopped by union members of GM Korea at the carmaker's plant in Bupyeong, Incheon, Friday. Despite the union's strong protest, GM Korea shareholders approved the company's a plan to establish a separate research and development unit . / Yonhap |
By Nam Hyun-woo
GM Korea shareholders approved its plan to establish a separate corporate body for research and development Friday, despite its union's effort to disrupt their meeting.
At the shareholders' meeting held at its plant in Bupyeong, Incheon, the automaker's shareholders gave the green light to the plan to establish a GM Korea Technical Center despite objections from the state-run Korea Development Bank (KDB).
GM holds a 77 percent stake in GM Korea, with KDB and SAIC Motor controlling 17 percent and 6 percent, respectively.
After the approval, GM Korea said, it would complete registration and other subsequent processes, and would develop new cars at the new corporate body.
A series of legal battles and disputes with its union is expected to follow, however, because the approval was made without the participation of the second-largest shareholder, the Korea Development Bank (KDB), at the meeting.
Union members staged a sit-in protest at the ant's main building, preventing KDB officials from entering.
"KDB officials were waiting in front of the building, but GM Korea suddenly gave notice that the plan had been approved," a bank official said.
Union members said they set up a perimeter to stop the meeting after skirmishes with hired private security.
"As far as we know, the majority of executives did not enter the meeting room," a union official said. "It is doubtful whether the meeting was held legitimately."
GM Korea has been pushing the plan to spin off its R&D unit from GM Korea's manufacturing facilities, saying the move would allow each unit to focus on their respective activities and improve efficiency.
After its board approved the plan, the company said it would seek the final go-head at the shareholders meeting, but did not disclose the venue.
The union has been opposing the plan, saying the move was a preliminary attempt to sell the Korean unit, allowing GM to withdraw from Korea.
The union had already voted to go on strike during a two-day vote, with 78 percent of the 10,234 members agreeing to a walkout to protest the spinoff.
KDB also expressed its opposition to the plan, saying, "GM Korea did not discuss and explain the plan sufficiently with the KDB, which was a violation of the MOU which it signed in return for receiving aid from the state-run bank to address the company's financial troubles."
In the MOU, GM Korea stated that approval from shareholders with a total of at least an 85 percent stake was required for "special resolutions" of the company, giving the KDB, the second-largest shareholder with a 17 percent stake, the power to exert its influence on GM's decision making.
However, GM Korea and the KDB disputed whether the spin-off plan could be regarded as a special resolution.
Another option for the KDB to disrupt the plan was its right to veto the approval.
According to GM Korea, the MOU states that the KDB can use its veto when the company attempts to spinoff or sell more than 20 percent of total assets. The new R&D body is valued at 350 billion won ($309.4 million), which accounts for 4 percent of GM Korea's assets.
After the KDB, GM headquarters, GM Korea and its union agreed to the MOU and the aid in which the headquarters offered $6.4 billion and KDB poured in $750 million, the carmaker seemed to be recovering from the feud, introducing new cars here.
However, the dispute over splitting the company is again dragging GM Korea down.
