General Motors Co. will propose a base wage freeze, no bonuses in 2018, and suspend some worker benefits at its South Korean unit to cut costs, Reuters reported Feb. 23, citing an internal letter.
"It is impossible to pay 2018 bonuses/one-time payments in 2018," GM said in a letter to union team leaders.
On Feb. 12, the company said it will shut down its Gunsan facility by the end of May as it decides on the fate of its three other South Korean plants. High wages and unyielding unions have contributed to GM's problems in the country, said executives.
The automaker, in the letter, also proposed limiting future wage increases below inflation, Reuters reported. Benefits such as school tuition fees for employees' children and travel expenses for long-serving workers will also be suspended.
A GM Korea official declined requests for comment, while the union has yet to receive GM's proposal, said a spokesperson.