Seoul: Hector Villarreal, chief executive officer of GM Korea Co., has urged the South Korean government to reassess a contentious pro-labor "yellow envelope bill" before it proceeds through parliament, industry sources revealed. Villarreal expressed his concerns during a meeting on Thursday that included labor ministry officials and executives from the automobile, shipbuilding, and steel sectors.
According to Yonhap News Agency, Villarreal highlighted serious apprehensions regarding the bill, indicating that South Korea already faces significant risks in corporate-labor relations. He cautioned that General Motors Co., the parent company, might reevaluate its operations in Korea if the legislation is enacted. Although Villarreal did not explicitly mention a withdrawal, he suggested that GM Korea might cease to function as a primary production hub for its global markets in Asia under the new legislative conditions.
Speculation regarding a potential GM exit has intensified due to declining sales, a lack of new models, and a 25 percent tariff on imported vehicles imposed by the United States in April. This tariff was later reduced to 15 percent in late July after negotiations led to South Korea's US$350 billion investment commitment in the U.S.
GM Korea currently exports approximately 85 percent of its production to the U.S., with vehicles assembled at its plants subject to American tariffs. The automaker operates two manufacturing facilities in South Korea: one in Bupyeong, which produces the Trailblazer SUV, and another in Changwon, which manufactures the Trax Crossover for both domestic and export markets.
On Sunday, the National Assembly approved the yellow envelope bill, which modifies the Labor Union Act to ensure subcontracted workers' bargaining rights. The bill also prohibits companies from filing damages suits or seeking provisional seizures against unionized workers, a tactic critics argue has been used to stifle strikes.
Business groups have strongly opposed the legislation, contending that it could lead to workplace chaos and promote collective action over business decisions, including foreign investments. In 2018, GM considered withdrawing from South Korea but committed to remain for at least a decade following an 810 billion won (US$750 million) public fund injection by the government. Nonetheless, GM closed its Gunsan plant in 2019 due to low demand.
In May, GM Korea announced restructuring plans, including the sale of some after-sales service centers and production facilities, which added to concerns about its long-term presence in the Korean market.