GM Korea to slash executive numbers, talks with union make little progress

SEOUL, Feb 28 (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 US automaker as it attempts a politically contentious restructuring of the loss-making business.

GM, which has some 16,000 employees in South Korea, also asked staff to "actively consider" a previously announced voluntary redundancy plan which has a Friday deadline, a separate letter showed.

The automaker this month shocked South Korea when it said it would shut one of its factories in the country and decide the fate of three remaining plants in the coming weeks.

The letters underscore the difficulties GM faces as it tries to wrangle concessions on wages from an angry labour union and win financial support from a South Korean government that is set to conduct due diligence on what it has called GM Korea's "opaque" management.

Although talks with unions have come much earlier than expected with union leaders under pressure to make concessions to prevent more factory closures, a union official said that initial discussions on Wednesday had not made any progress.

According to one of the letters sent to staff, GM Korea plans to cut the number of executives ranked managing director or more senior by 35 per cent and reduce the number of directors and team leaders by 20 per cent.