GM’s Restructurings, Workers’ Struggles, and International solidarity

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Just before last Chuseok(Korean Thanks Giving holidays), the GM Korea branch of the Korean Metal Workers’ Union(we call it ‘regular workers’ Union’ as follows) staged an eight-hour full-scale strike for three days. The regular workers’ union asked the management to come up with a package proposal for the union’s demands, but the management eventually failed to respond to the negotiation offer. It seems that the management felt burdened by its evasion of negotiation. They asked for talks and sent suggestions on September 19, after Chuseok(Korea thanksgiving holidays). But the contents hadn’t changed much from before. It said that wage raises and bonuses were not available because the company continued to be in the red. And there was no definite answer to the return of reduced welfare benefits, nor the outlook for development since 2022. The same was true of the reinstatement of laid-off irregular workers. Eventually, the Regular workers’ union decided to go on strike after September 23 and got ready for it.

GM Korea has not applied the existing collective agreement to its GMTCK(GM Technical Center Korea) workers. GMTCK was created through the separation from GM Korea earlier this year. Furthermore, it also openly showed its intention to introduce a performance-based pay system against its workers and try to revive the team system. Outside the factory, as the scheduled return to the double-shift at the 2nd Bupyeong plant comes near, irregular workers are demanding the reinstatement of workers who were laid off for restructuring. They have waged a hunger strike, and the aerial sit-in, which has been underway for nearly a month.

Meanwhile, GM, which has several plants in many countries around the world, is undertaking restructurings everywhere. In Thailand’s La Yong plant, GM tries to cut 327 workers, citing reduced supplies. In Brazil, GM is also at loggerheads with trade unions for trying to reduce the number of regular workers and expand the number of irregular workers to save costs. In particular, some 50,000 U.S. GM workers went on strike for the first time in 12 years. UAW, which includes GM workers in the U.S., has conceded for more than a decade since the 2008 U.S. economic crisis, which has worsened the situation of auto workers.

During the visit to Korea in August, Julian Blissett, the president for GMIO(International Operations), threatened the workers. He said that if the labor union’s strikes continue, he would have no choice but to move the ‘Trax’ model, which is assigned to the 2nd Bupyeong plant, to the other country’s plant. Such threats are not new to GM. Because GM keeps threatening that unless the quality level is achieved, the number of employees is reduced, and the arrangement efficiency is increased, it will not assign new car models. In doing so, GM has used job security as a weapon, Making workers compete with each other in factories around the world and threatening the survival of workers. This is why GM workers must unite not only in their own countries but around the world to fight against GM, which is a transnational capital. Although the “GM Global Network Meeting” exists at IndustriALL union, it has yet to exceed some information sharing. It is now a situation where substantial international solidarity is needed.

This article is exactly for that international solidarity. I believe that it is necessary first to share GM’s ongoing restructurings in S. Korea and workers’ struggles against them to all the workers around the world, as well as in S. Korea.

Restructurings that have been underway

① GM bought Daewoo Motors at a low price and began to use irregular workers on a large scale

GM’s full-fledged business in S. Korea dates back to the year 2000. Under the influence of the 1998 IMF crisis in Korea, Daewoo Motors was bankrupt in 2000. In the process, a large-scale layoff of 1,750 workers was carried out. Kim Dae-jung government sold Daewoo Motors to GM with a very low price of 500 billion won(about 418 million dollars) to solve its bankruptcy. Daewoo Motors had four plants in Bupyeong, Changwon, Gunsan, and Boryeong. After taking over Daewoo Motors at a low price, GM renamed it as GM Daewoo and received various tax benefits and free lease of factory sites from the Korean government.

As GM recovered production scaled back since Daewoo Motor’s bankruptcy and began to carry the double-shift, it reinstated 1,750 laid-off workers. However, it hired irregular workers massively, and its number was more than 2,500. GM paid them at half the wages of regular workers, and their labor intensity was almost twice that of regular workers. In particular, irregular workers were deprived of their right to join the existing union.

In 2007, irregular workers set up their own union against poor working conditions and job insecurity, such as outsourcing. But GM mobilized the labor-management team to oppress the union violently. For example, when some union members promoted on joining the union in a cafeteria at lunchtime, the labor-management team took away banners and beat the members with fists. Some workers’ eardrums were burst, and their eyes were hurt. Also, GM fired some union members by shutting down their subcontractors.

② The bankruptcy of GM in 2009 and the mass layoffs of irregular workers at GM Korea

The U.S. economic crisis that began in 2008 caused GM to go bankrupt in June 2009. The U.S. government bailed out and turned old GM into “New GM.” In the process, massive layoffs took place in S. Korea. GM produced much of its vehicles for export to North America at GM Daewoo’s Bupyeong plant. Car sales plunged in the wake of the economic crisis in the United States, which resulted in large-scale production reductions at the Bupyeong plant. To reduce the superfluous workforce, GM Daewoo rearranged regular workers to other places and fired irregular workers who were working there. As a result, 1,500 irregular workers who had worked at the Bupyeong plant were fired.

GM quickly overcame the crisis. It was not only because of the U.S. government’s bailout fund but also thanks to the production capacity of its Gunsan plant. The Gunsan plant produced more than 70 percent of the Chevrolet brand at the time. Workers at the Gunsan plant, especially irregular workers, worked overtime and overtime to help GM escape the crisis. But the situation didn’t last long.

③ In 2013, GM withdrew the Chevrolet brand from Europe, which led to the collapse of GM Korea’s Gunsan plant.

The aftermath of the U.S. economic crisis was felt in Europe. As sales of GM cars decreased in Europe around 2014, GM unilaterally withdrew its Chevrolet brand from Europe. GM shifted all costs incurred from the withdrawal of the Chevrolet brand onto GM Korea. GM, Headquartered in the U.S., made the decision of withdrawal, and GM Korea took the damage cost. (GM Daewoo changed its name to GM Korea in March 2013.)

The impact of the withdrawal of Chevrolet from Europe was not limited to it. Workers at the Gunsan plant, which had produced many of Chevrolet vehicles for Europe, were driven into job insecurity. GM Korea called on its workers to slow the average production rate, soon changed the shift to the single-shift and scaled back operations at the plant. Together with forcing regular workers to make several sacrifices, GM Korea cast the bait that they could work without temporary closure if they accepted the single-shift. But it would lead to the layoffs of irregular workers at the Gunsan plant.

The regular workers’ union took the bait of GM Korea and made the mistake of accepting the layoffs of irregular workers as inevitable. About 1,000 irregular workers were laid off at the Gunsan plant. It was the second time that irregular workers had been victimized since 2009. However, the company’s rhetoric did not last long. Production was curtailed as expected because of the single-shift, the temporary closure was still repeated, and workers were in constant fear of job insecurity.

④ The Shutdown of Gunsan Plant in 2018

On February 13, 2018, GM Korea announced the shutdown of its Gunsan plant rapidly ahead of the Lunar New Year holidays. It was also the day that a group of irregular workers at GM Korea won a lawsuit against the illegal use of irregular workers. It was a ruling by the Incheon District Court that the use of the irregular workers by GM Korea was illegal. Rather than the news of the winning lawsuit of irregular workers, the media reported the shutdown of GM Korea’s Gunsan plant.

The shutdown date for the Gunsan plant, announced by GM Korea, was in June when the local election was planned to be held. Starting with the announcement of the shutdown of the Gunsan plant, Barry Engle, the former president of GMIO, came and went to the National Assembly and the Korea Development Bank as if he went to his home. He kept threatening that unless the Korean government supported GM Korea, he had to withdraw GM from S. Korea. Eventually, the government and the ruling party succumbed to GM’s threats ahead of the local election and decided to provide 810 billion won(about 677 million dollars).

At the same time, GM and the S. Korean government have blackmailed workers. If they do not accept concessions such as a wage freeze and reductions in welfare benefits, there would be no providing funds, and GM Korea would not avoid bankruptcy. The regular worker’s union eventually succumbed and accepted the concessions. In a massive voluntary retirement program, about 3,000 regular workers, including the Gunsan plant, left the plant involuntarily. About 500 regular workers at the Gunsan plant, who refused to voluntary retirement, were forced to take unpaid leave indefinitely, while 200 irregular workers who remained at the Gunsan plant were immediately fired.

⑤ GM’s restructurings continue

GM’s restructurings have not ended after the shutdown of the Gunsan plant and concessions made by workers. All-round restructurings have occurred. The KD(knockdown) plant, which generated enormous profits for GM Korea ever before, was shut down at the end of 2018. Regular workers maintained their employment with the rearrangement, but all irregular workers were fired as of the end of 2018. GM Korea enforced the single-shift at the 2nd Bupyeong plant. As workers resisted it, it introduced the single-shift under the precondition of returning to double-shift at the end of 2019. At that time, GM Korea fired hundreds of irregular workers again, saying that there was a redundant workforce because of the single-shift.

GM also separated GM Korea into the production part and the research and development part. It means reducing GM Korea’s production part to a subcontract production base and amplifies the potential withdrawal of GM Korea. Although workers protested the move by thwarting a shareholders’ general meeting, GM eventually enforced its corporate separation in January 2019. After the corporate separation, GM Korea nullified the collective agreement of workers in the new corporation. And it keeps trying to revive the abolished performance-based pay system and introduce the team system to divide workers.

It also carried out restructurings of its spare parts warehouse. It has attempted to reduce the directly operated service centers in S. Korea from 9 to 5. The number of employees in the service centers has diminished to the point which the clients cannot be serviced on time. It also unilaterally announced the shutdown of the Incheon parts warehouse earlier this year and shut it down in July. Currently, GM Korea is pushing for the single-shift at the Changwon plant. It says that Light car sales have fallen, which leads to a reduction in the amount of production. If it carries the single-shift, there will be another massive layoff of irregular workers. Efforts to strengthen the intensity of labor by increasing the arrangement efficiency at the 1st and 2nd Bupyeong Plant are underway too.

Workers’ Struggles and International Solidarity

In 2017, GM appointed Kaher Kazem as the president of GM Korea, who spearheaded restructurings in Australia and other countries. Kaher Kazem has enforced unilateral restructurings since the inauguration of the president of GM Korea. He says he wants to develop the company with workers. But GM’s decision to restructure the company has carried unilaterally despite any opposition from workers.

GM’s offensive restructurings are underway not only in S. Korea but also around the world. Its avowed cause is the rapid changes in the global auto sales market. GM says of cars that have no smoke, no traffic accidents, and no traffic jams. It will focus on businesses such as electric vehicles, self-driving cars, and car-sharing. Behind the scenes, however, is one-sided coercion of workers’ sacrifices. GM uses the fact that it has factories around the world to blackmail to threaten to move its factories, encourage competition among workers, and force them to make concessions. The concessions may be in some cases, redundancy or reductions in wages and welfare benefits and others, an increase in the number of irregular workers. Meanwhile, it is also extorting aid money from governments through job threats.

Under capitalism, car production is run so anarchic, not free from overproduction. If the production structure dominated by inter-capital anarchic competition continues, no matter how much the electric vehicle is produced, it cannot overcome the overproduction crisis or solve the climate problem. Just because electric cars, self-driving cars, and car-sharing make demands for cars decrease, and the development of productive forces does not require a lot of workers, layoffs of workers should not be the only solution. Instead, workers will have to put forward alternatives to reduce working hours and ease labor intensity by controlling car production. It is why workers must fight the restructurings pushed by auto capital, such as GM. To that end, GM’s workers from around the world must create struggles against GM together. It is necessary for workers fighting against GM in S. Korea and the U.S. to make statements in support of each other and quickly try various actions, including staging strikes on the same day.

Finally, the workers in S. Korea must reflect on and overcome the problems of the existing unions. While GM Korea’s restructurings have continued, the workers have not fought properly. In particular, the regular workers’ union committed anti-worker behaviors such as maintaining job security based on sacrificing irregular workers. In the struggle against capital, the union leadership failed to establish union members as the main actors of the struggles. Nor did it try to change the attitude of members that they look away from other workers’ job insecurity once they earn job security. With overcoming these problems of the existing unions, we must create international solidarity against GM. The workers’ struggles of GM Korea are the same as those of GM workers in other countries such as the United States, Thailand, and Brazil, etc.

Editorial note

In S. Korea, we use two terms: a regular worker(정규직 노동자) and an irregular worker(비정규직 노동자). A regular worker refers to a person who is permanently employed by a company. An irregular worker refers to a person who is employed in precarious conditions, such as a temporary worker with a short term contract, a subcontract worker dispatched to a different company, and a part-timer, etc. Most irregular workers receive lower wages and are in worse working conditions than regular workers. After the late 1990s, the number of irregular workers has increased under the influence of neoliberalism.

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