SEOUL (Reuters) - General Motors’ South Korean unit is offering workers three times their annual base salary, money for college tuition and more than $9,000 (£6,472) towards a new car as part of a voluntary redundancy plan at the troubled automaker.
The package, made in a notice to employees seen by Reuters, came after GM said on Tuesday it will shutter the plant in the southwestern city of Gunsan by May and decide within weeks on the fate of its remaining three factories in the country.
Unionised workers staged a protest regarding the planned closure on Wednesday.
The so-called Voluntary Separation Programme opened to employees on Tuesday and will last until March 2, according to the internal document.
“This is the most compensation we can provide given our management conditions and it will be difficult for us to offer more benefits going forward,” the company said in the letter.
“GM Korea has recorded a financial loss of nearly 3 trillion won (£2.01 billion) over the past four years and continues to make losses as a result of low utilisation rates, continued rises in labour costs and an excessive workforce,” the letter said.
Detroit-based GM has said it will book an $850 million charge to reflect the restructuring costs, including $375 million in cash related to employee expenses.
A GM Korea spokesman confirmed the details of the document, saying the offer was “part of efforts to proceed with restructuring in an orderly manner”.
The average annual wage at the plant, including wages and allowances, is around 87 million won, the GM spokesman said. Across South Korea, the average household income was 50.1 million won in 2016.
Workers will also be eligible for up to 13.2 million won towards two years of university tuition. Education fees for kindergartens and junior and high schools for their children will also be covered.
A GM Korea source said some 150 factory workers were let go last year under a similar compensation package.
Reporting by Hyunjoo Jin; Additional reporting by Cynthia Kim; Editing by Lincoln Feast