General Motors Korea has reached a tentative pay deal with its labour union, reportedly averting a potential strike.
Reuters noted that agreement came after GM Korea CEO Sergio Rocha earlier this month warned that potential labor unrest could lead to further production cuts in South Korea. The deal is subject to a union vote on Wednesday and Thursday.
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GM’s December announcemen it would stop selling Chevrolet-branded cars in Europe by the end of 2015 hit output at the plant in Gunsan, South Korea, which produces most of the Chevy cars sold in Europe.
Reuters said that, as part of the labour deal, GM reversed an earlier decision not to make the next-generation Chevrolet Cruze at Gunsan. But it won’t be made until 2017, according to GM’s proposal to the union that was seen by Reuters, meaning the Gunsan plant may remain underused until then.
“We can’t win it all. We will leave the deal to the judgment of our union members,” union spokesman Jang Kyung-dae told Reuters.
The company said the two sides had reached a deal in “a smooth and peaceful way” and confirmed the new wage and bonus terms.
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By GlobalDataGM’s South Korean workers earlier this month voted to go on strike over stalled wage talks.
Under the deal, GM Korea agreed to pay a combined KRW10.5m (US$10,200) in bonuses and incentives to each worker and raise the basic wage by KRW63,000.
The bonuses and incentives are slightly higher than last year’s, while the basic wage increase was less than last year’s rise of 92,000 won. For workers with 20 years experience, the basic wage increase is about 3.3%, a union official told Reuters.
The company also agreed to revamp its wage scheme, which has been in place since 1953, after the country’s supreme court ruled late last year that regular bonuses should be counted as base wages.
