GM Korea decided to put on hold a mid-size car production facility installation inside Plant 1 in Bupyeong. This had originally been planned for implementation during the Lunar New Year holiday period. Accordingly, the controversy over plant merge and abolition and the production scale reduction is forecast to subside for the time being. However, as the company holds fast to its original stance to produce the follow-up model of Malibu in Plant 1, the embers of dispute still remain.
GM Korea announced on the 8th that it would withdraw the Plant 1 mid-size car production facility implementation plan, which had been scheduled to take place around the 18th according to the labor – management agreement at the end of last month. The goal of the scheduled construction had been to shift the production site for mid and semi large-size cars, such as Malibu, Captiva and Alpheon, from Plant 2 to Plant 1. Some analyzed that this is a step towards the company’s plant merger and abolishment. At present, Plant 1 is producing only compact and semi mid-size cars, such as Gentra and Trax. (See Electronic Times dated Jan. 12, pages 1 – 2)
According to this decision, the Plant 1 construction will be postponed to at least the second half of the year. For a large-scale construction, such as this, to build a new production line, the company needs to make use of the holiday period during which the plant operation is suspended. However, there are no long weekends or holidays until the summer holiday period in July. The decision on the production site for E2SC (a follow-up model of Malibu), which is a key to the Plant 1 construction, will also be postponed. It has been reported that E2SC was not included in the ten new vehicles to be released by GM Korea this year.
However, the company sticks to its original plan to produce E2SC from Plant 1. As much as so, it is possible for the facility construction to resume at any time. However, as there still is a disagreement with the labor union that has defined Plant 1 construction as the company’s ‘conspiracy to reduce plant scale,’ a conflict can again be created in the second half of the year.
The construction plan withdrawal is analyzed to be the result of the company being aware of the labor union’s objection and the controversy over production scale reduction. As the news about Plant 1 construction plan spread, the labor union expressed opposition by commencing a sit-in in front of the plant. GM Korea President Sergio Rocha retracted the construction plan by starting a negotiation process with the labor union immediately after re had returned from the U.S. at the end of last month, according to sources.
“There is quite a disagreement with the labor union and we judged that we still need more discussions. So, we decided not to start the construction during the Lunar New Year holiday period,” said a GM Korea insider. “This is not a final decision (to withdraw the construction plan) as the company is holding fast to the position that it would produce the follow-up model of Malibu from Plant 1.”