Korea GM Labor and Management Reach Tentative Agreement on This Year's Wage Negotiations: "Performance Bonus of 4 Million Won to Be Paid"

Tentative Agreement Reached in 24th Negotiation Session Held on 24th-25th

[Image source=Yonhap News]

[Asia Economy Reporter Kim Ji-hee] The labor and management of Korea GM reached a tentative agreement on this year's wage and collective bargaining agreement (CBA) negotiations on the 25th. This comes about four months after the initial meeting in July.

According to Korea GM, the labor and management prepared a tentative agreement during the 24th round of 2020 CBA negotiations held over two days starting the day before. With this tentative agreement, the refusal of overtime and special work that had continued since the 23rd of last month, as well as partial strikes, are expected to cease.

The tentative agreement includes the company's payment of a performance bonus of 4 million KRW, including a COVID-19 crisis overcoming encouragement bonus. Additionally, the production schedule of models at Bupyeong Plant 2 will be extended as much as possible considering market demand, and an investment of 19 million USD will be made at Bupyeong Plant 1 starting next year.

The proposal for a "two-year cycle wage negotiation" suggested by the management during the negotiation process was not included in the tentative agreement. Korea GM argued that extending the wage negotiation cycle to two years could reduce management uncertainty and provide stability to employees, but this was blocked by the union's opposition.

The union held a Central Dispute Countermeasure Committee (CDCC) meeting in the afternoon and plans to suspend the existing struggle guidelines. Accordingly, the strike by the Korea GM union, which had lasted for fifteen days from the 31st of last month until today, has also stopped.

However, variables remain until the final settlement. The tentative agreement must receive majority approval in a union member vote scheduled for next week. Since the tentative agreement differs from the union's original demands, which included a basic wage increase of about 120,000 KRW and a performance bonus of over 20 million KRW, and because key issues such as the allocation of new cars to Bupyeong Plant 2 have not been clearly resolved, it is uncertain whether union members will vote in favor.

This year's Korea GM CBA negotiations caused much controversy amid repeated conflicts. Due to repeated strikes since last month, the accumulated production loss is estimated to exceed 20,000 units. Adding this to the 60,000 units lost in production disruptions caused by the COVID-19 pandemic in the first half of this year, Korea GM's plan to break even this year has effectively been derailed.

On the 18th, Steve Kiefer, GM Overseas Operations President, pressured the union by suggesting the possibility of withdrawing from the domestic market in an interview with a foreign media outlet, stating, "If labor-management conflicts are not resolved within a few weeks, the long-term future of the Korean business cannot be guaranteed." Partner companies also emphasized that they are already in a serious crisis due to the COVID-19 situation and urged a swift conclusion to the CBA negotiations.