General Motors (GM) chairman Dan Akerson confirmed the company's plans to invest USD8 billion in its South Korean unit during a business meeting with South Korean president Park Geun-hye in Washington (United States), reports Yonhap English News. Akerson confirmed GM's investment, which was first announced in February, assuaging concerns about a possible withdrawal from South Korea in the wake of rising tensions between North Korea and its neighbour. However, Akerson stated that the company's future course of action will depend on how its South Korean operations are affected by the weakness of the Japanese yen, as well as on the issue of whether bonuses should be included in normal pay. Meanwhile, GM Korea has rolled out an upgraded version of the Chevrolet Spark, the Spark S, which features an enhanced 1.0-litre gasoline (petrol) engine, a C-TECH powertrain, and MyLink infotainment system. The Spark S will cost between 9.08 million and 13.73 million won (USD8,344 and USD12,616) and will go on sale next week.
Significance: Last month, the automaker announced contingency plans in the wake of rising tensions with North Korea, and the company's union responded by stating that it would defend its members' rights. In addition, Akerson's concerns about the issue of the inclusion of bonuses in usual pay centre on fears that a court ruling could increase the cost base of GM Korea. Government regulations stipulate that bonuses should be excluded from the usual pay, but recent court decisions have overturned the rule in individual cases. GM Korea's labour union has filed a suit and is awaiting a Supreme Court decision. GM Korea fears that should the inclusion of bonuses in usual pay be established, it would further burden the company, affecting its cost competitiveness, which is already being hurt by the weak yen. Although South Korea is of strategic importance in GM's global small-car operations, GM Korea is facing a tough time with its workers on account of the restructuring drive it launched last year and because of its decision not to build the next-generation Chevrolet Cruze in South Korea. Both moves sparked fears of a possible production shift to Europe, worsening labour-management relations.
