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| GM Korea CEO Kaher Kazem |
Prosecutors indicted GM Korea CEO Kaher Kazem, Tuesday, for violating the Labor Law, a blow to Korea's third largest automobile manufacturer which has been struggling financially amid the COVID-19 pandemic.
The prosecution also indicted four other senior managers whose identities were not immediately made public.
"Between Sept. 1, 2017 and Dec. 31, 2019, GM Korea hired 1,719 local temporary workers through 24 unauthorized human resources agencies and put them to work making automobile frames, painting and assembling parts which was illegal," the prosecution said in a statement issued the same day.
The Labor Law requires companies to hire temporary workers through authorized human resources agencies only, and bans temporary employees from working on car production lines.
Prosecutors in Incheon, Changwon and Jeonju cooperated in the indictment; and while they did not seek the detention of the accused, they did call for them not to be allowed to leave the country.
Founded in 2011, GM Korea produces seven vehicle models for the domestic market and export. According to its website, the company produces 920,000 vehicles annually.
As a subsidiary of General Motors, it also provides kits for assembly in the U.S.
General Motors and its affiliates controls the company with a more than 75 percent stake ― the Korea Development Bank is the second largest shareholder.
The company currently has factories in Incheon, Changwon, South Gyeongsang Province and Boryeong, South Chungcheong Province. In February 2018, it closed down its factory in Gunsan, North Jeolla Province and laid off thousands of workers triggering a series of lawsuits.
Kazem has been the CEO since September 2017.
GM Korea has suffered operating losses since 2014. Its total sales both at home and abroad during the January-May period this year plunged 28.1 percent to 140,053 vehicles from 194,721 during the same period last year.
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