General Motors Korea to slash executive numbers

General Motors this month shocked South Korea when it said it would shut one of its factories in the country and decide the fate of three remaining plants in the coming weeks. (Reuters)
Updated 28 February 2018

General Motors Korea to slash executive numbers

SEOUL: General Motors’ South Korean unit plans to slash the number of its executives, an internal letter seen by Reuters showed — the latest step by the US automaker as it attempts a politically contentious restructuring of the loss-making business.
GM, which has some 16,000 employees in South Korea, also asked staff to “actively consider” a previously announced voluntary redundancy plan which has a Friday deadline, a separate letter showed.
The automaker this month shocked South Korea when it said it would shut one of its factories in the country and decide the fate of three remaining plants in the coming weeks.
The letters underscore the difficulties GM faces as it tries to wrangle concessions on wages from an angry labor union and win financial support from a South Korean government that is set to conduct due diligence on what it has called GM Korea’s “opaque” management.
Although talks with unions have come much earlier than expected with union leaders under pressure to make concessions to prevent more factory closures, a union official said that initial discussions on Wednesday had not made any progress.
According to one of the letters sent to staff, GM Korea plans to cut the number of executives ranked managing director or more senior by 35 percent and reduce the number of directors and team leaders by 20 percent.
A GM Korea spokesman confirmed the plan, noting that the unit had around 150 executives and hundreds of team leaders.
“Changing our leadership structure is another of many initiatives to move forward the viability of the company,” he said.
The unit also plans to shrink the number of so-called “international service personnel” executives, who have been dispatched from GM headquarters and other affiliates overseas, by 45 percent.
In particular, generous packages for the 36 such expats which include support for housing, cars and payment of school fees for their children have come under fire from GM Korea’s labor union.
The changes will start immediately and with all set to be in place by the third quarter of this year, the letter said, which added that a freeze was being put on executive promotions.
In a separate letter, GM Korea stressed to employees that they only had till Friday to apply for the redundancy program and urged them to apply. 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 proposal.
In talks with the union, GM is proposing a base wage freeze and no bonuses this year along with a suspension of some benefits such as the payment of university tuition for employees’ children and gold medals for long-serving workers.
The talks on Wednesday ended after just a couple of hours, the union official said.
“Management is demanding unilateral sacrifice by the union, but the company should come up with a turnaround plan,” he said, adding that demands by the union for executives’ wages to be disclosed had been rejected.


Case against Ghosn excuse to get him out of Nissan, claim lawyers

Updated 13 November 2019

Case against Ghosn excuse to get him out of Nissan, claim lawyers

  • The former motor giant chief’s legal team has alleged that both his arrest and the prosecution efforts have been illegal

TOKYO: The drama surrounding the arrest of Carlos Ghosn, former boss of motor giants Nissan and Renault, has yet to reach its climax. Yet the plot continues to thicken with each new development.

On Monday, Ghosn’s defense lawyers unveiled court submissions highlighting the circumstances in which the 65-year-old executive was arrested and subsequently held in detention.

“We believe that Mr. Carlos Ghosn is innocent. We believe that the arrest and the prosecution efforts thus far are illegal and therefore Mr. Ghosn should be immediately released,” the head of his defense team, Junichiro Hironaka, said during a press conference at the Foreign Correspondents Club of Japan in Tokyo on Monday.

Hironaka claimed that Nissan wanted to kick out Carlos Ghosn from the company and therefore put together a team dedicated to searching around for something that would justify them to do that.

“This prosecution motion wasn’t initiated because the prosecution side believed that Mr. Ghosn had committed an illegal act. Fundamentally there is a problem with this being treated as a criminal act,” he said.

Hironaka further said that the prosecutor’s office is supposed to be acting in the public good for everyone and not behalf of a specific corporation.

“From the investigation level, there were various problems and mistakes with this case. Furthermore, the Japanese persecution office can’t reach overseas so they rely on Nissan employees to go into Mr. Ghosn’s offices and residences and removed objects illegally,” he said.

Hironaka said there is no evidence to support the alleged wrongdoing claim that Nissan made payments to SBA in Oman, and Ghosn re-directed that money to himself or his family.

“The amounts that were paid by Nissan matched exactly the amounts due to SBA,” he said.

The lawyer had a similar response to the reports connecting some donations by Ghosn to a school in Lebanon that would somehow benefit himself. “There is absolutely no evidence or factual basis for indicating that,” Hironaka said.

He said that his team is trying to access correct information and find out what evidence the prosecution might have.

“I have made an effort to share information with the media, including the foreign media, during this whole pre-trial motion,” he said.

Under the Japanese system, the prosecutors are not required to disclose all the evidence at their disposal. Japanese law requires that prosecutors must disclose anything related to any evidence related to the specific filings they make.

They must also disclose any evidence that is related to the filings that are made by the defense counsel. However, there is no requirement for them to disclose evidence from other parts.

Ghosn was arrested at Tokyo’s Haneda Airport on Nov. 19, 2018, on multiple charges related to his stewardship of the two companies.

The cases involved not only Nissan-Renault and Japan’s Mitsubishi Motors (part of the Franco-Japanese alliance), but also the Japanese and French governments along with various key players from Asia and the Middle East.

Nissan was on the brink of bankruptcy in March 1999, with about 2 trillion yen ($17.6 billion) in interest-bearing debt.

This is when it entered a capital partnership with major French automaker Renault SA. Ghosn has been credited for turning the company around dramatically since then.

However, fears that the high-profile CEO and chairman was planning to merge Nissan into a much larger multinational motor alliance appeared to have fueled speculation regarding the future of the company.

It was reportedly argued within Prime Minister Shinzo Abe’s government that the automaker would no longer be recognizably Japanese.

The case has larger ramifications and the two governments have routinely become involved in discussions related to its future.

According to news reports, when Macron and Abe met in Buenos Aires, the French president asked that the Franco-Japanese alliance be maintained.

On being asked by Arab News Japan about reports of a prosecution team visiting Saudi Arabia and Oman, Hironaka confirmed that the visit indeed took place after Ghosn’s arrest.

“However, we have not been given any access to any information that they may or may not have gathered there,” he said.