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.


German economy defies trade gloom with strong growth

Updated 16 min 31 sec ago
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German economy defies trade gloom with strong growth

  • Germany’s economy, Europe’s biggest, grew by 0.5 percent compared with the previous three-month period
  • Economists had forecast a 0.4 percent increase this time

BERLIN: The German economy accelerated in the second quarter despite the US move to impose new tariffs on Europe, official data showed Tuesday, performing slightly better than economists had expected.
Germany’s economy, Europe’s biggest, grew by 0.5 percent compared with the previous three-month period. That is up from 0.4 percent in the first quarter — a figure that was revised upward Tuesday from the initial reading of 0.3 percent given in May. Economists had forecast a 0.4 percent increase this time.
Its performance in the April-June period was helped by higher private and government spending and by increased investment in equipment and construction, the Federal Statistical Office said. Rising exports were outpaced by increasing imports.
The figure underlined the German economy’s continuing robust performance, with business confidence high and unemployment low despite some disappointing data on factory orders this year and concern about global trade tensions.
It has now grown for 34 of the past 37 quarters, said Carsten Brzeski, an economist at ING in Frankfurt, but he cautioned that “the challenges facing the German economy will increase rather than decrease.”
Those include the specter of a possible escalation of trade tensions, despite a recent deal to defuse a US-European Union dispute, geopolitical risks such as that posed by events in Turkey and a shortfall in investment and structural reforms at home, he said.
In year-on-year terms, the economy expanded by 2.3 percent in the second quarter.