GM warns persistent strikes to force it out of South Korea

General Motors Co warned that persistent industrial unrest would eventually drive it out of South Korea as it had cost the company 17,000 vehicles in lost production.

He noted said that the number would reach 20,000 by the end of the week.

Steve Kiefer, president of GM’s international operations, warned that the strikes would make it impossible for GM to allocate further investments or new products in South Korea as it is making the country non-competitive.

That strike-triggered loss in production was on top of the 60,000 units lost earlier in the year due to the pandemic.

GM Korea would likely not turn a profit this year unless it could recapture that output, Kiefer lamented.

Workers have been staging strikes daily since Oct. 30 for an end to a wage freeze implemented in 2018 as part of the agreement to save the Korean operations from bankruptcy.

The South Korean government gave GM a rescue package worth $7.15 billion in 2018 that would also keep it from exiting its investment in the country for 10 years.

The automaker employs about 12,000 and builds as many as 500,000 vehicles per year in South Korea. Many of the vehicles are shipped to the US.

GM is offering a two-year labor deal and has offered union members a signing bonus of 8 million won each for 2020 and 2021.

But the union wants the usual one-year deal and a yearly performance bonus of 22 million won each.

The workers also demanded continued operation at both plants in Bupyeong.

There are also demands for current and former subcontract workers to be employed full-time staff that could cost GM Korea about $320 million.

GM Korea reported operating losses of 332 billion won in 2019, and 615 billion won in 2018.