South Korean Union Prompts Strike as GM Will Not Build New Aveo Here image

The labor union in South Korea has threatened strike action after GM announced that it will not manufacture the next-gen Aveo small car in the region.

Sergio Rocha, the head of GM Korea, told the labor union in South Korea that the US automaker will manufacture the next-generation Aveo in China and the US, and that it might build the model in South Korea also, two years after its launch. GM’s decision comes amid talks about the salary of its South Korean employees and prompts fears that the company might consider reducing its presence in the region. Currently GM makes in South Korea 4 out of 10 Chevrolet vehicles sold in the whole world.

“It was a shocking announcement,” the union said. “Should there is no change in the company’s stance, the labor union will be able to launch strike action – our biggest legal weapon.”

Therefore, a strike is imminent if the labor union and GM fail to reach an agreement on future production plans and wages until the end of this month. For the moment, the Aveo which is sold in China is being exported from South Korea, as complete knockdown kits for manufacturing. GM said that the increasing tensions with the union makes the company have second thoughts about building cars in this country.

Source: Reuters