March 16, 2018 11:06
Unionized workers at ailing GM Korea on Thursday agreed to freeze their wages and forfeit their bonuses this year in exchange for stock options.
Instead of the W10.66 million annual average windfall they enjoyed for the past three years, they want W30 million worth of stock options per employee (US$1=W1,065).
The workers are asking GM headquarters to distribute among staff the W405 billion worth of stocks that will be created if the automaker swaps around W3 trillion in loans extended to the Korean unit into equity.
GM headquarters in the U.S. are aghast at the demand, especially coming from workers in a subsidiary that posted cumulative net losses of W3 trillion over the last four years.
The union presented the demand to management, and negotiations are set to start next week. Still, the union departed from calls by the umbrella Korean Metal Workers' Union to seek a 5.3-percent wage hike. GM Korea union leader Lim Han-taek said, "We decided not to seek a wage hike and bonus this year as part of efforts to overcome the crisis."
Industry watchers say the concessions do not go far enough. Unionized workers rejected calls to whittle down welfare benefits and added new clauses in their proposal seeking to ban the GM Korea from laying off workers for the next 10 years and staff all executive positions except the CEO with Koreans.
Management says benefits also need to shrink to generate profits, whereas the union wants W120 billion worth of benefits. GM Korea hopes to save W140 billion through the wage freeze and forfeiture of bonuses.
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