GM Korea union votes to strike against R&D center plan

Unionized workers at GM Korea Co. voted Tuesday to go on strike to protest the carmaker's plan to establish a separate R&D corporation.

In the two day vote that began Monday, 78 percent of the 10,234-member GM Korea union agreed to a walkout as a sign of opposition to the R&D entity plan, which they see as an initial step to shut down its car manufacturing operations in South Korea.

They expressed concerns that GM will, in the long run, only maintain a research facility in the country.

The company said it plans to hold a shareholders' meeting on Friday to push forward the plan to integrate its existing design and engineering divisions into a separate R&D-focused entity. Its board of directors gave the go-ahead to the plan last week.

GM Korea President and Chief Executive Kaher Kazem (Yonhap)

In a letter sent to employees, GM Korea President and Chief Executive Kaher Kazem said, "The establishment of a dedicated GM Korea Technical Center, Ltd. is an important development in continuing to strengthen our organization and to position our company in the best possible way forward with focused leadership to more effectively respond to and secure and execute global engineering projects."

The establishment of GM Korea Technical Center will help the carmaker put a bigger focus on local manufacturing, export and domestic sales and continue to position itself as a globally competitive manufacturer of high quality vehicles, powertrains and components, he claimed.

The company plans to name the new R&D entity as GM Korea Technical Center if it gains approval in the shareholders' meeting.

GM Korea has argued that the planned R&D company will carry out design and development work for GM's best-selling compact sport utility vehicles.

But the state-run Korea Development Bank, the second-biggest shareholder in GM Korea after GM, recently filed an injunction against the shareholders' meeting with a local court.

In May, GM and the KDB signed an agreement to permit a combined 7.7-trillion-won ($6.7 billion) lifeline -- 6.9 trillion won from GM and 810 billion won from the KDB -- to keep the loss-making Korean unit afloat.

In the same month, the Detroit carmaker shut down one of its four car assembly plants in Korea due to a low utilization rate of 20 percent.

GM holds a 77 percent stake in GM Korea, with the KDB and SAIC Motor Corp. controlling 17 and 6 percent, respectively. (Yonhap)