SEOUL (Reuters) – General Motors’ South Korean unit plans to slash the number of its executives, an internal letter seen by Reuters showed – the latest step by the U.S. automaker to cut costs and restructure the loss-making business.
GM said this month it would shut one of its factories in South Korea and decide the fate of the three remaining plants in the coming weeks – a decision that will depend on the concessions it can wrangle from its local union and the amount of government support it can secure.
GM Korea plans to cut the number of executives ranked managing director or more senior by 35 percent and reduce the number of directors and team leaders by 20 percent, said the letter, which was sent to staff on Wednesday.
GM Korea also plans to slash the number of so-called “international service personnel” executives, who have been dispatched from GM headquarters and other affiliates overseas, by 45 percent.
The changes will take place by the third quarter of this year, the letter said, which added that a freeze was being put on executive promotions.
A GM Korea spokesman confirmed the plan. The unit has about 150 executives, he said.
GM plans to resume wage talks with its labor union on Wednesday morning. GM is proposing a base wage freeze and no bonuses this year along with a suspension of some benefits such as tuition for employees’ children and gold medals for long-serving workers.
Reporting by Hyunjoo Jin; Editing by Edwina Gibbs
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