South Korea Workers Give up Benefits to Help GM Daewoo

Benefits affected are mid-term settlement of retirement pay, athletic and membership meetings, summer vacation camps and payment for fixed annual leave.

Workers at the troubled South Korean unit of General Motors agreed on March 6 to a cut in welfare benefits to help the company reduce costs amid the economic slump, officials said. The global crisis has strengthened labor-management solidarity at some local companies, despite South Korea's reputation for workplace strife. The benefits move followed a campaign by union leaders to support GM Daewoo's request for one trillion won (US$645 million) in emergency loans from creditors.

The country's third-largest carmaker, acquired by GM in 2002, said the benefits cut was endorsed by 85% of 9,998 unionised workers who voted. It would affect mid-term settlement of retirement pay, athletic and membership meetings, summer vacation camps and payment for fixed annual leave, spokesman Kim Young-Soo said.

GM Daewoo CEO Michael Grimaldi said the agreement "reflects the strong commitment of all GM Daewoo team members to work together...during these very difficult economic conditions brought on by the global financial crisis."

About 100 union leaders took to the streets on March 5 to hand out leaflets calling for public support. "GM Daewoo is a Korean company," they said in the leaflet and vowed to support the company's cost-saving drive.

In other signs of cooperation, executives of Hyundai Heavy Industries, the world's largest shipyard, have agreed to forfeit their entire month's pay. The move followed a union decision to leave wage decisions in the hands of management.

Last month representatives from national labor and management organisations agreed on a landmark compromise to try to save jobs. The unionists agreed to wage freezes or cuts at troubled workplaces while the management promised to refrain from layoffs. The government and civic organizations pledged to support economic recovery measures.

Copyright Agence France-Presse, 2009

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