General Motors Co.’s labor union in South Korea has threatened to launch a strike action in response to the carmaker’s disclosure that it will not build the next-generation Aveo small car at the country for the time being. Sergio Rocha, the head of GM Korea, told the union that the carmaker had decided to produce the new Aveo in China and the United States.
South Korea will have a chance to build the model two years after its launch, the union said in a statement. GM’s decision comes amid wage discussions between the carmaker and its South Korean workforce, giving rise to fears that the company will reduce its presence in the country.
The union described GM’s decision as a “shocking announcement." The union added that it would launch a strike if it fails to ink an agreement with GM management over wages and future production plans this month.
The Aveo being sold in China is currently exported from South Korea as complete knockdown kits for assembly. Executives at GM have remarked that rising wages and stiff labor relations have made it increasingly unappealing to build vehicles in South Korean.
The union claims that GM’s decision is in contrast to the carmaker’s earlier vow to build cars-- including its next-generation global mini, small and midsize cars -- in South Korea. A union official noted that it is unlikely that GM Korea will build the new Aveo two years after the launch, since by then the model will be older and call for less demand.