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GM Describes “Most Critical” Labor Talks in Korea
Sergio Rocha, CEO of GM Korea, tells Bloomberg News this year's labor talks in South Korea will be the company's most critical negotiations ever.
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Sergio Rocha, CEO of GM Korea, tells Bloomberg News this year's labor talks in South Korea will be the company's most critical negotiations ever.
He says labor costs could climb 15% this year after the country's Supreme Court ruled in December that periodic bonuses and certain other compensation must be included in worker base pay.
Rocha points out that increasing base pay has a multiplier effect, because base pay is used to calculate bonuses and other compensation. General Motors, Hyundai and Kia are challenging their unions' interpretation of the court ruling.
The court agreed with workers at auto components company KB AutoTech Co. that bimonthly bonuses they were receiving should be made part of their wages, Bloomberg notes. But the court rejected the worker's claim that welfare benefits and seasonal allowances be included.
The Korean Employers Federation has estimated the court ruling will boost annual labor costs for companies in Korea by at least 13.8 trillion won ($13.5 billion), Bloomberg reports.
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