TOKYO -- Striking autoworkers at GM Korea Co. have scuttled production of hundreds of vehicles this month, as the union and management haggle over wages and working conditions.
Partial walkouts today entered their seventh day at GM's four assembly plants in South Korea. The operations, a key production base for the Detroit carmaker, export 80 percent of their output and build about 40 percent of all Chevrolets sold globally.
Workers first laid down tools for six hours on July 4. Since then, they have refused overtime work and cranked up the sporadic walkouts, GM Korea spokeswoman Jina Hwang said.
Talks ended without conclusion earlier today and were expected to resume tomorrow. Workers, represented by the Korean Metal Workers' Union, planned a 10-hour shutdown tomorrow. Since July 4, GM has lost more than 136 hours of production at its four plants. The total doesn't include lost overtime.
GM declined to say how many units were foregone. But Hwang said that lost output tallied "definitely more than 1,000" vehicles.
The unrest comes at critical time for GM's South Korean unit and its boss Sergio Rocha. Beside being a top manufacturing operation, GM Korea's r&d and design centers lead global development of small cars such as the Chevy Sonic and Spark.
The U.S. carmaker is investing more in South Korea to help develop products, including a next-generation electric vehicle; to enlarge the design studio; and to improve factory efficiency.
But uncertainties loom, including labor reforms, the slowdown in Europe, and an increasingly unfavorable won exchange rate.
The latest talks are part of annual wage negotiations. But they are complicated by additional issues, such as a new work schedule that reduces factory hours. The union is also concerned about GM's commitment to keeping local production volume steady.
"The labor union calls for the company to present a detailed implementation plan for an eight-hour back-to-back shift system union official Chong Hyewon said. "Another important issue is the future plant for next-generation vehicles and powertrains."
GM already has said it will stop making the Chevy Cruze small car in South Korea, when the next generation arrives. The union worries that signals a gradual erosion of work for Korea.
The next generation Sonic compact is also at risk, Chong said.
The new work schedule, known as a back-to-back system, is the result of a labor contract won after a strike last summer. That strike erased 48,000 units of production at GM.
New work schedule
The new schedule means plants will be running for around 16 hours a day, not 20. The aim is reducing night work by bunching shifts together. Both sides have agreed to implement it at the beginning of 2014, but the crux is how to do so, Hwang said.
The union wants be compensated for the lost hours, she said.
"If we reduce working hours, since they are working fewer hours, their pay will be different. But the labor union wants compensation for these lost hours as well," Hwang said. "For the company, it is important not to lose production volume."
The union counters that South Korea's labor system is structured around meager base wages and meaty compensation in overtime and holiday pay. Pulling the plug on that overtime pay would torpedo a disproportionate chunk of total take-home pay.
"The current wage structure reflects distortions built over a long period of time," Chong said. "It's no use if union members have to seek extra work at night in order to make up for lost income. Especially at GM, the company's recovery has not been reflected in improvements in workers' living standards and lags far behind workers at Hyundai and Kia."
A similar labor deal also affects rivals Hyundai Motor Co. and Kia Motors Corp. Those companies are also still fine-tuning the details. GM undertook a trial of the system in March. Local output at GM Korea fell 4 percent that month as a result.
Rocha says his company wants to recoup lost production possibly by accelerating line speeds and cutting break times.
As part of the wage campaign, the union is also demanding a 130,498 won ($114) increase in the monthly base wage, as well as a bonus equivalent to 300 percent of the base wage plus a lump sum payment of 6 million won ($5,253), Hwang said.
Last year, workers demanded a bonus of 500 percent of their ordinary wages but didn't ask for a lump sum payment, she said.
Management first met union leaders to hammer out details on April 23. They had held 20 sessions so far.