SEOUL General Motors' (GM.N) South Korea chief warned employees that a potential strike could lead to further production cuts in one of its major Asian manufacturing bases, according to an email sent to staff and obtained by Reuters.
GM's 15,000 unionised workers in South Korea plan to cast ballots on Tuesday and Wednesday on whether to stage a strike for a fourth consecutive year, signaling a resurgence of summer labour unrest in the country's auto industry.
"We have seen such (strike) decisions boomerang on us. If a loss in production is incurred again this year due to strikes, the result could be much worse than we can imagine," GM Korea CEO Sergio Rocha said in the email, which was dated Monday.
The U.S. automaker said in December that it would stop selling its Chevrolet-branded cars in Europe by the end of 2015, a move that hit output at its South Korean unit, which produces most of the Chevy cars sold in Europe.
That decision helped send GM Korea's exports slumping by a quarter in the first half of this year from a year earlier.
"It may lead to an additional reduction in production volume, which is closely related to our job security. We need to stop this vicious cycle before it is too late," Rocha said.
GM Korea and its labour union started annul wage talks in April, but they have been locking horns over wage increases and future production plans.
"GM Korea is at a critical juncture...While there are a number of issues that have weakened our competitiveness such as soaring costs, and labor conflicts, losses as the result of strike actions during previous negotiations represent one of the biggest," Rocha said.
A GM Korea spokesman declined to comment on the email, while a union spokesman was not immediately available for comment.
Automakers in South Korea are often subject to labour strikes during annual wage talks, although they usually recoup most lost production by working longer hours once talks are settled.
Workers at Renault SA's (RENA.PA) South Korean unit last week voted in favour of a strike, although talks continue, while ongoing wage talks at Hyundai Motors (005380.KS) are expected to drag on into next month.
(Reporting by Hyunjoo Jin; Editing by Matt Driskill)