SEOUL Workers at General Motors Co's (GM.N) factories in South Korea, a key manufacturing base for the U.S. automaker, will stage a partial walkout on July 4 because of disputes over wages and production plans, a union spokesman said on Thursday.
The partial walkout comes during annual wage talks that began in April. GM Chief Executive Dan Akerson and other executives have raised concerns about a further increase in labor costs partly because of ongoing wage lawsuits filed by GM's South Korean workers.
But GM's South Korean union has said its "cost per vehicle" is half of that in Australia and lower than several other peers, including Russia.
The union was also angered by GM's decision not to produce the next-generation Cruze compact in South Korea, which sparked fears about a potential restructuring of the unit.
Last week, 79 percent of union members at GM Korea voted in favor of strike action. Union leadership decided late on Wednesday to launch a partial strike for six hours on July 4, and to refuse overtime and weekend work for now, said Choi Jong-hak, a union spokesman.
He said union leadership would decide whether to continue the partial strike depending on progress in the wage talks.
"The management did not come up with any concrete proposal during yesterday's talks. It will be difficult to reach a deal and we are likely to continue the strike," he told Reuters.
In July to September last year, GM Korea suffered its biggest-ever strike since it was created in 2002, resulting in lost production of 40,000 vehicles.
GM's South Korean unit makes more than four out of 10 Chevrolet-branded vehicles sold globally and supplies almost all Chevys sold in Europe. It also produces vehicle kits for assembly in China and so many other emerging markets. The unit exports Opel's Mokka SUV to Europe and Chevy Spark minicar to U.S. and other markets.
Under the annual wage talks, GM Korea's union negotiators have called for a bonus equivalent to three months' salary and a one-time payment of 6 million Korean won ($5,300) as well as a basic salary increase of 130,498 won.
The two sides have also locked horns over a new shift system that will eliminate overnight work from the start of 2014, with the union demanding that management make up for reduced wages stemming from fewer work hours.
The union is also calling for the company to produce the revamped Cruze as well as other next-generation models in South Korea and to have the unit continue to play a key role in engineering and designing GM's mini and small cars.
"Wage talks are still under way. We hope to expedite negotiations to reach a deal and avoid production losses," GM Korea spokesman Kim Byeong-soo said, adding that the annual wage pact was traditionally reached by early August.
On May 28, Hyundai Motor Co (005380.KS), South Korea's biggest automaker, and its labour union started their annual wage talks under which the union is demanding a bonus equivalent to eight months' salary and an extension of the retirement age to 61, among others.
(Reporting by Hyunjoo Jin; Editing by Chris Gallagher)