GM warns labour unrest making South Korea untenable

DETROIT/SEOUL, Nov 18 (Reuters): General Motors Co has issued its strongest warning yet that persistent industrial unrest could drive it out of South Korea, just two years after it received a state-backed rescue package to stay.

GM workers have been staging two, four-hour strikes daily since Oct. 30 as they demand an end to a wage freeze put in place after the 2018 deal that saved the Korean operations from bankruptcy.

The strikes and other industrial action have cost the company 17,000 vehicles in lost production, a number that will hit 20,000 by the end of the week, Steve Kiefer, president of GM's international operations, told Reuters.

That blow to production was on top of the 60,000 units lost earlier in the year as the novel coronavirus spread, making it likely GM Korea would not turn a profit this year unless it could recapture that output, he added.

"We're basically being held hostage in the short term by lack of vehicle production," Kiefer said in a telephone interview. "That's having a very significant short-term financial impact."

The industrial action would "basically make it impossible for us to allocate any further investments or ... new products to the country of Korea. It's making the country non-competitive", he said.

"It is going to have long-term effects if we can't get this resolved in the coming weeks."