GM Korea workers approve
strike as wage talks stall
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[July 09, 2014] SEOUL
(Reuters) - General Motors' South Korean workers on
Wednesday voted to go on strike over salaries and
production volume, signalling tough annual wage talks
for automakers already grappling with falling earnings
due to the stronger won.
Strikes are an almost annual event in South Korea's $173 billion
auto industry, but this year's unrest could be more prolonged than
usual as workers are calling for the revamping of a 60-year-old wage
scheme among other demands.
A union spokesman said 69 percent of GM Korea's 14,016 workers voted
to down tools and walk out for a fourth consecutive year unless they
reach a deal.
A union spokesman was not immediately available for comment as
representatives were engaged in another round of negotiations with
GM Korea management.
A spokesman for GM Korea said the vote did not mean that there will
be an actual strike and said it was one of the union's "ordinary
actions" during annual negotiations.
"Both sides remain committed to reaching a fair and reasonable
labour agreement based on mutual trust and understanding," the
Unions are demanding changes to the wage scheme, which has been in
place since 1953, because the country's supreme court ruled late
last year that fixed bonuses should be counted as base wages.
Workers want their new contract to comply with the ruling because it
would increase various statutory benefits, such as overtime
allowances and severance pay, which are adjusted in proportion to
GM Korea workers are also calling for management to boost production
after the U.S. automaker announced plans to stop selling
Chevrolet-branded cars in Europe by the end of 2015.
South Korea is one of GM's biggest Asian manufacturing bases,
producing nearly all Chevy cars sold in Europe and more than four
out of 10 Chevrolet vehicles marketed globally.
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GM Korea CEO Sergio Rocha on Monday warned employees that a strike
could jeopardise production and job security, and urged them to
"stop this vicious cycle before it is too late".
GM Korea and other rivals like Hyundai Motor Co are wrangling with
their individual unions over whether to overhaul the current wage
system, which management says could lead to higher labour costs.
Workers at Renault SA's South Korean unit last week voted in favour
of a strike, although talks continue, while ongoing wage
negotiations at Hyundai are expected to drag into next month.
Hyundai is expected to report lackluster second-quarter earnings
later this month as the South Korean won posted its biggest annual
percentage gain in nearly three years versus the dollar, eroding its
overseas earnings converted into the South Korean currency.
(Reporting by Hyunjoo Jin; Additional reporting by Choonsik Yoo;
Editing by Matt Driskill)
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