Korea GM, Union Near Deal to Keep 3 of 9 Service Centers Open; Talks Resume

Korea GM and its labor union have reached a working-level understanding to keep some company-run service centers open, rather than shutting them all, industry sources said. Final issues include how to reassign service-center staff to plants and the terms of any voluntary retirement program. 

According to the industry on the 10th, the two sides will hold a second round of main talks at 10 a.m. at the company’s headquarters to discuss the planned closure of its company-owned service centers. They have continued working-level discussions since the first main talks in January and are returning to formal negotiations as their positions have narrowed.
 
Korea GM previously said it would close all nine of its company-run service centers nationwide as of Feb. 15. To improve financial health, it planned to sell assets including service-center sites and shift maintenance and repair work to 383 partner service centers nationwide. After the union pushed back and filed legal action, including a request for an injunction, the sides began seeking a compromise through a working-level consultative body.
 
So far, they have tentatively agreed to close six of the nine centers. The plan would keep the Daejeon, Jeonju and Changwon service centers operating and establish a “high-tech center” in Bupyeong. The high-tech center would handle work that is difficult to resolve through partner service centers.
 
A union official said the high-tech center is intended to fill gaps created by reducing the company-run network to three sites and to take on cases requiring advanced, specialized repair skills, either by referral from partner centers or by handling them directly.
 
The key test will be the second round of main talks. Because the plan remains tentative, some union members may oppose it. The downsizing also leaves unresolved what happens to surplus staff. About 320 engineers work across the nine service centers, but if the plan is finalized, the required headcount would fall to about 70, including the high-tech center.
 
That would leave roughly 250 workers to be reassigned to production jobs or to take voluntary retirement. Those who want to stay are expected to be transferred to the Changwon and Bupyeong plants. For voluntary retirement, terms are also an issue; a proposal has been discussed to pay 10 million won per person in consolation money, according to the report. 
 
If an agreement is finalized in the second round of talks, speculation that Korea GM could withdraw from South Korea is expected to ease. But the union official said strong opposition cannot be ruled out because the changes would sharply reduce the service-center operation, adding that the main talks will decide whether to approve the plan.