SOUTH KOREA: GM Korea to outsource CKD, lay off 1,000
GM Korea wants to outsource production for CKD kit exports to subcontractors by 2014, endangering the jobs of at least 1,000 employees in Korea.
GM executive Tim Lee announced plans to outsource production of 'completely knocked-down' cars for export at GM Korea headquarters. CKD kits accounted for 62% or 1.28m units of GM Korea's total production of 2.08m last year.
According to the company, over 10,000 people work in production full-time, and 2,000 work on CKD production and packing. The kits are assembled in countries such as Russia, India and China.
GM Korea plans to lay off 1,000, or 10%, of the workforce through voluntary retirement or other redundancy measures. GM blames the high production cost in Korea.
Over the past several years, labour costs in other overseas plants of GM decreased but in Korea they rose, the automaker said.
The company's labour union has already voiced strong opposition and vowed to scupper the plan.
CKD packing is highly specialised and labour-intensive. Other automakers such as VW Group's Audi outsource such work, just-auto understands.