GM Introduces Voluntary Retirement Plan in South Korea

GM South Korea plans to introduce a ‘voluntary retirement’ scheme for its 7,000 office workers.

GM Korea spokesman Park Hae-ho confirmed the plan and said that its purpose is to enhance the company’s ‘organizational efficiency.’ He also added that it is the first time when the automaker has resorted to such a move for its office workers. Park did not say the reduction target, but mentioned that the plan will not affect the 10,000 production workers.

This reduction plan increases concerns regarding a restructuring at GM Korea, which is being squeezed by rivals Hyundai and Kia. GM Korea is affected by the shrinking auto market and sluggish demand, being forced to cut jobs in response to this. Renault South Korea has already cut 800 jobs, which means 15% of its workforce through a similar program.

Since 2008 GM South Korea’s market share has fallen under 10% and during the first ten months of this year it had a 9.4% share in the domestic market, compared with Kia and Hyundai which controlled almost 80%. This plans and the earlier announced that GM will not manufacture the next-generation Chevrolet Cruze in South Korea were seen as a declaration of ‘war’ by the labor union.