General Motors’ closure of South Korea plant a ‘death sentence,’ union says

Unionized workers of GM Korea protest against the US carmaker’s plan to close the plant in front of its plant in Gunsan on Wednesday, February 14. (Yonhap via Reuters)
Updated 14 February 2018
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General Motors’ closure of South Korea plant a ‘death sentence,’ union says

GUNSAN/SEOUL: General Motors’ (GM) workers at a South Korean plant staged a protest on Wednesday against its planned closure, calling the move by the US automaker a “death sentence,” and threatening a strike.
GM’s South Korean unit launched a voluntary redundancy scheme for its 16,000-strong workers in the Asian nation after announcing on Tuesday it will shutter the plant in Gunsan by May and decide within weeks on the fate of the remaining three plants in the country.
Unionized workers at the Gunsan plant, which employs 2,000 people, wore red headbands saying “Solidarity, Fight” and held leaflets demanding the withdrawal of the closure plan. Some had shaved their heads.
“Let’s protect our right to live by ourselves,” Kim Jae-hong, the leader of the workers’ union at the Gunsan branch, said amid tears.
GM’s planned revamp of its loss-making South Korea operations is the latest in a series of steps by the automaker to put profitability and innovation ahead of sales and volume. Since 2015 GM has exited unprofitable markets including Europe, Australia, South Africa and Russia.
It is offering South Korean workers three times their annual base salary, money for college tuition and more than $9,000 toward a new car as part of the redundancy package.
A spokesman of GM Korea, the local unit, said the company would continue discussions with the union and seek their understanding over the closure plan.
But workers were far from placated. The union will establish a detailed plan in protest against the shutdown move that could include a possible strike and holding of a sit-in rally at the headquarters of GM Korea, according to the union’s Gunsan branch.
“We can’t accept this. The company informed us about the closure plan, not asking for our opinion. It was already the end of the discussions,” Dang Sung-geun, a senior official at the union of GM Korea, said by phone.
“This is like a death sentence notice before the Lunar New Year holidays.”
Dang said about 1,200 unionized workers from GM Korea joined the protest at the Gunsan factory, a day before the Asian country begins lunar new year holidays. Gunsan is located in the southwest of the country.
US President Donald Trump on Tuesday used GM’s decision to close the plant to launch fresh criticism of the US-South Korea trade agreement.
Trump recently approved tariffs on South Korean washing machines, while South Korea has vowed to take countermeasures through the World Trade Organization (WTO).
South Korea’s trade ministry said on Wednesday it will take a dispute against the US to the WTO, involving imposition of high anti-dumping duties on South Korean steel and transformers.
GM executives have complained about South Korea’s relatively high wages and its strike-prone labor union. But Dang of GM Korea’s union blamed the company for reducing output, saying lower wages were not acceptable.
The automaker’s restructuring plan places South Korean President Moon Jae-in in an uncomfortable spot, as he has pledged more new jobs and job security.
South Korea’s strong labor unions have weighed on the country’s automobile industry, which Moon’s administration views as a challenge, a trade ministry official said.
“The South Korean auto industry’s high cost and low productivity has been a deep-rooted issue, which can’t be fixed overnight, but we will try to resolve this issue by building trust with the unions and the companies,” said the official who asked not to identified.


Britain’s M&S says must accelerate change or die

Updated 23 May 2018
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Britain’s M&S says must accelerate change or die

  • After taking account of adjusted items of 514.1 million pounds, including the charge relating to store closures, pretax profit was 66.8 million pounds, a 62 percent fall
  • M&S is one of the best known brands on British high streets

LONDON: Britain’s Marks & Spencer said on Wednesday it urgently had to modernize or risk fading away as it reported a second straight decline in annual profit and booked a 321 million pounds ($430 million) charge for a store closure program.
The 134-year-old M&S faces unrelenting competition from supermarkets, fashion chains like Zara, H&M and Primark, as well as online giant Amazon, while efforts to revitalize its business are being hampered by ongoing pressure on UK consumers’ spending power.
M&S reset its strategy in November, two months after retail veteran Archie Norman joined as chairman, detailing a five-year program of store closures and relocations, and moves to make its misfiring food business more competitive.
On Tuesday M&S said it would close 100 UK stores by 2022, further accelerating the plan as it strives to make at least a third of sales online.
M&S, one of the best known names in British retail, said it made a pretax profit before one-off items of 580.9 million pounds ($778.6 million) in the year to March 31.
That was ahead of analysts’ average forecast of 573 million pounds but down from 613.8 million pounds made in 2016-17.
After taking account of adjusted items of 514.1 million pounds, including the charge relating to store closures, pretax profit was 66.8 million pounds, a 62 percent fall.
Turnover was broadly flat at 10.7 billion pounds.
“We have to modernize our business to ensure we are competitive and reignite our culture. Accelerated change is the only option,” said M&S.
Shares in M&S have fallen 26 percent over the last year and the firm is in danger of being booted out of the prestigious FTSE 100 index.
The stock closed Tuesday at 292 pence, valuing the business at 4.7 billion pounds.