General Motors Co will not pull out of South Korea but will discuss labor woes with South Korea's President, its CEO was quoted as saying by its Korean union, a move that could complicate already troubled relations with its local workforce.
Chief Executive Dan Akerson said last month GM might look at shifting output from this key production base in the long-term due to tensions between South and North Korea, angering the union. This latest development suggests annual wage talks will not be easy when they start later this month.
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Akerson plans to bring up concerns about labor in talks with South Korean's President Park Geun-hye during her U.S. trip this week. He made his remarks at a meeting with GM Korea's union leader last week in Detroit, union spokesman Choi Jong-hak said.
"We are upset by his remarks. We did not go all the way to the U.S. to hear that," Choi said.
A Shanghai-based spokeswoman for GM's international operations declined to comment, saying the automaker considers meetings between GM senior leaders and union officials to be private.
South Korea is one of GM's biggest overseas manufacturing bases, producing more than four out of 10 Chevrolet vehicles sold globally, but the industry is prone to disagreements with what it says are uncooperative unions.
Speculation about a possible shift of some production to bolster ailing European manufacturing centres has continued despite GM saying in February that it would invest $7.3 billion in its South Korean unit over the next five years.
A wage lawsuit filed by GM Korea's labor union members could lead to an increase in labor costs, which have already grown too fast over the past decade, executives have said.
Hyundai Motor Co <005380.KS>, South Korea's biggest automaker has its own labor woes, with workers having refused to work weekends since March, hurting sales and earnings in the latest quarter.
Choi said Akerson's previous comments on a potential shift of production was an empty threat to tame the union ahead of talks on a possible restructuring of production systems.
"GM cannot withdraw from South Korea. We have technology to make good cars and our wages are only about one third of those in the United States and Europe," he said.
(Reporting by Hyunjoo Jin; Additional reporting by Norihiko Shirouzu in BEIJING; Editing by Edwina Gibbs)