2,500 GM Korea Workers Accept Early Retirement

Some 2,500 workers at GM Korea's doomed plant in Gunsan and two others have accepted an early retirement package, the carmaker said.

An industry insider said about half the 2,000-plus workers at the plant in Gunsan have signed up, as did staff at the plants in Bupyeong and Changwon who are almost at the retirement age. The number of applicants was larger than expected.

GM Korea decided to shut down the Gunsan plant because it has been operating at less than 20 percent capacity for years and falling. Staff who sign will get two or three years of wages as severance pay plus two years worth of tuition assistance for their children, which comes to some W200-300 million per worker (US$1=W1,080).

Earlier, GM Korea said it needs to lay off between 3,000 to 4,000 workers to adjust for reduced output and cut costs. With the number of workers who sign up nearing the company's target, industry watchers believe GM Korea will not have to fire any staff.

"Many of factory workers in Bupyeong and Changwon decided to leave the company, so it may be able to relocate some staff from Gunsan there," the insider said. "But if wage negotiations with the labor union fail, there could still be trouble ahead."

But Reuters reported that GM Korea submitted a plan to the government to lay off 30 percent of staff or 5,000 employees, though it hopes to create 1,100 new jobs over the next 10 years and produce two new SUVs and a small car engine in Korea.