GM CEO to visit Korea to meet union

By Nam Hyun-woo

General Motors Chairman and CEO Mary Barra will visit Korea to talk with GM Korea union over their dispute on demerging the Korean unit of the U.S. carmaker into a separate research & development (R&D) body and a manufacturing unit.

According to the union, Monday, Barra sent a reply to GM Korea union head Lim Han-taek's letter last Wednesday requesting a meeting.

“We think the demerger is an important step to allow both the engineering services company and the manufacturing unit to stand on their own as profitable, viable businesses,” Barra said in the letter. “I would like to visit our Korea operation at some point soon and look forward to visiting with you and other key stakeholders then.”

If she meets the union, it will be her first visit to Korea after she took the chairmanship in January 2016. Barra planned a visit to Korea in August 2016 but canceled it. She has been the CEO of GM since January 2014.

Over the timeframe, the union said it hopes for the meeting to take place in November, while GM Korea said it is unlikely to happen within this year because it has to set the schedule with the government and Korea Development Bank (KDB), which holds a 17.02 percent stake in GM Korea.

In the letter, Barra said GM has been reiterating its desire to create a “strong, viable and globally competitive GM Korea” and its moves including the agreement with KDB “makes it clear that our hope and intent is to stay for the long term.”

Over the demerger plan, GM Korea, its union and KDB are staging a trilateral dispute.

GM Korea says setting the R&D body will be a technological hub in the region benefiting its ties to Korea, while the union says the move is a prelude to its withdrawal from Korea, by turning the company into an engineering team subcontracting the manufacturing unit. After establishing such a structure, the R&D body can withdraw from Korea more easily, the union claims.

KDB, which provided aid to cash-strapped GM Korea and signed an MOU mandating GM's medium- and long-term commitment to Korea, is also taking the union's side.

“The creation of a dedicated engineering services company will also further strengthen GM's long-term ties to Korea, and it benefit from focused management, increased transparency on costs, and improved operational efficiency that will make it more attractive for GM to allocate further engineering work to Korea,” Barra said.

“The GM Korea engineering team has been assigned strategically important global programs and GM will consider awarding GM Korea additional work in the future after the demerger is completed.”

Over Barra's letter, the union said “it is positive to receive a reply but the content of it is disappointing because it lacks details on the demerger.”