GMDAT to acquire Daewoo Incheon car plant after wage settlement

[nadepalma]

Source: http://wardsauto.com/ar/auto_gmdat_set_plant/index.htm

GMDAT Set for Plant Acquisition After Wage Settlement: GMDAT and Daewoo Incheon ratify a new wage agreement and set the tone for GMDAT’s acquisition of Daewoo’s main Bupyong production facility.
WardsAuto.com, Aug 5 2005

GM Daewoo Automotive & Technology Co. (GMDAT) says it has ratified a wage agreement with Daewoo Incheon Motor Co. (DIMC), ending weeks of labor strife and paving the way for GMDAT to acquire DIMC’s main Bupyong manufacturing plant in Incheon, South Korea.

The factory originally was not included in the acquisition by General Motors Corp. and its partners of the assets of the former bankrupt auto maker Daewoo Motor Co. Ltd.

The wage agreement, which was approved by 56% of voting union members and finalized on Aug. 2, includes a 2005 monthly wage increase of 85,000 won ($83.70), or 6.77%, with an additional 62,310 ($61.35) won monthly increase becoming effective in April 2006.

GMDAT also will pay its workers a lump-sum signing bonus payment of 1.5 million won ($1,477), and an additional 1 million won ($985) bonus to be paid a by the end of the year, GMDAT says.

Upon the satisfactory conclusion of the labor negotiations, GMDAT says it will proceed with its plan to acquire DIMC and the Bupyong facility, a move GMDAT says it agreed to do by 2006 or 2007.

The acquisition of Bupyong, which currently accounts for nearly half of GMDAT’s production, will allow GMDAT, South Korea’s third largest auto maker, to better compete with domestic competitors Hyundai Motor Co. Ltd. and Kia Motors Corp.

GMDAT expects the deal to be completed by the end of the year.

“Integrating Bupyong provides us full control over all aspects of the business and allows us to better able control our own destiny,” GMDAT President and CEO Nick Reilly says. “Most importantly, it will allow us to truly operate as one company.”