By Lee Hyo-sik
GM Korea, a local unit of U.S. automotive giant General Motors (GM), will face an uphill battle with its hard-line labor union in wage and collective bargaining negotiations in June.
The union is demanding Korea's third-largest automaker raise salaries and pay hefty lump sum bonuses. But management is appealing to unionized workers that they should refrain from making "excessive" demands when the company is losing money.
According to GM Korea, Tuesday, the union is asking the company to increase workers' base salary by 159,900 won ($145) and pay a one-time bonus worth 5 times workers' base salaries.
In 2014, GM Korea hiked the base salary by 63,000 won and paid each worker a 10.5 million won bonus. The carmaker also included all regularly paid allowances in base salary in accordance with a court's decision to avert a workers' strike.
Unlike Hyundai Motor and Kia Motors, whose employees staged a walkout over an "ordinary wage" issue last year, GM did not face such a strike.
However, things may be different in 2015 as management and the labor union are poles apart on wage hikes and other matters.
"Company management and the labor union held several preliminary meetings in April and May. Full-scale wage negotiations will begin in June," a GM Korea official said.
The official said the company will hold discussions with the union in a faithful and cooperative manner, expressing hope that both sides will reach a settlement in July. However, what the union is demanding this year is too excessive, given the company's performance, officials said.
In 2014, the automaker saw its revenue drop by 2.68 trillion won to 12.92 trillion won from 2013. It also incurred a 148.6 billion won operating loss, compared with a 1.1 trillion won operating profit in 2013. In the first quarter of 2015, it sold 198,017 vehicles at home and abroad, down 11 percent from a year earlier.
The union is also demanding the company produce more vehicles at its plants as falling production volumes have threatened their jobs.
GM Korea produced a total of 629,000 vehicles in 2014, down from 785,700 in 2012 and 942,800 in 2007, as its parent GM preferred to manufacture more cars outside Korea.
Unionized workers want the New Trax compact sports utility vehicle (SUV) and the Chevrolet Malibu sedan to be produced at its plant in Bupyeong, Incheon. They also want a company plant in Gunsan, North Jeolla Province to assemble the Chevrolet Cruze sedans.
The union is also asking the company to manufacture the Chevrolet Impala sedans at the Bupyeong plant, rather than import them from U.S. plants.
However, the company has decided to bring the Impala sedans from the U.S. for Korean consumers.
"We will talk with the union only about wages and other working conditions. What and how many we produce at our plants is not the subject of the wage bargaining," the official said.
The company plans to complete the wage negotiations as soon as possible without any mishap because troubles with unionized workers will further weaken GM Korea's status in the eyes of GM headquarters in Detroit.
Citing the hard-line labor union and hikes in labor cost, GM has often indicated that it would downsize its Korean operations and instead shift production from Korea to India and other Asian countries.