GM Korea workers vote to strike as wage talks continue
SEOUL (Reuters) -- General Motors' South Korean workers today voted to go on strike over salaries and production volume, signaling tough annual wage talks for automakers already grappling with falling earnings because of 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 structure among other demands.
A union spokesman said 69 percent of GM Korea's 14,016 workers voted to 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 labor agreement based on mutual trust and understanding," the spokesman said.
Unions are demanding changes to the wage structure, 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 base wages.
GM Korea workers are also calling for management to boost production after the automaker announced plans to stop selling Chevrolet vehicles in Europe by the end of 2015.
GM Korea CEO Sergio Rocha on Monday warned employees that a strike could jeopardize production and job security, and urged them to "stop this vicious cycle before it is too late".
GM Korea and other rivals such as Hyundai Motor Co. are wrangling with their individual unions over whether to overhaul the current wage system, which management says could lead to higher labor costs.
Workers at Renault SA's South Korean unit last week voted in favor 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.Contact Automotive News