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The all-new Chevy Cruze
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Past history fuels speculation that the company will not follow through on promises to assign new models
GM Korea labor and management reached an agreement to produce compact SUVs at the company’s Bupyeong factory from late 2019 and crossover utility vehicles (CUVs) at its Changwon factory from 2022. It was the first time plans for GM to assign new models were stated in a document disclosed outside the company. GM also indicated plans to assign new models in past foreign investment zone (FIZ) applications submitted to Incheon and South Gyeongsang Province, but these were not made public by the South Korean government. According to the 2018 tentative wage and collective bargaining agreement announced for GM Korea on Apr. 23, the company’s labor and management agreed to produce the two models for the domestic and export markets in Bupyeong and Changwon, starting respectively in a year and a half and four years. GM International president Barry Engle said GM planned to assign two “important new products” to South Korea, adding that GM would make the assignment of new models official once the South Korean government and other stakeholders confirmed their support. But while Engle stressed GM’s commitment to investing in the two “important new products,” some observers argue that the plan it announced for new models that day remains inadequate. The “9BUX” model’s assignment to Bupyeong is seen as more or less a “rehash,” with labor and management already agreeing on its assignment to the Bupyeong factory during wage and collective bargaining in 2016. Uncertainty is even higher for the new model to be produced at Changwon – an “imaginary car” for which a body design has yet to be revealed. After reviewing the FIZ application, Minister of Trade, Industry and Energy Paik Un-gyu requested additional information from GM, stressing that it needed to provide a “long-term investment plan, e.g., for new future cars with self-driving and other new technologies.” With past precedents of GM reneging on promises to assign new models, there is speculation that the latest labor-management agreement will not be enough to allay concerns about GM’s commitment to investing. After announcing in late 2012 that it would not be assigning its Cruze to the Gunsan factory, GM ended up in a tug-of-war with the union that ended with a promise in an Aug. 2014 wage and collective bargaining agreement to produce the model in Gunsan. A few months later in late 2014, the company changed its stance and claimed the model could only be assigned after the shift system was revised – resulting in a reorganization that led to pink slips for around 700 irregular workers. Some observers are predicting GM may use its new model assignment plan as leverage in the future to make new demands from the union or South Korean government. By Choi Ha-yan, staff reporter Please direct questions or comments to [english@hani.co.kr]
