Salespersons of GM Korea’s Chevrolet brands organized a labor union. It is the first time that the contracted salesmen, not salaried employee, unionized in Korea.

According to GM Korea and the General Temporary Workers Union (GTWU) under the Federation of Korean Trade Unions, Chevrolet Sales Union was organized by the salespersons of Chevrolet sales agents, joining the GTWU on 21st of August 2014

Chevrolet Sales Union was organized by 10 salespersons at the sales agents under the five sole distributors (Aju Motors, Samhwa Motors, SS Auto, Speed Motors, and Daehan Motors) that have exclusive contracts with GM Korea.

The union members explained the background that “Sales incentives amounting 500 thousand to 1.3 million won per month granted to over 6 month-old workers, but nullified when seven cars are not sold for three months at the least, while on-line sales get popular at a severe loss under the apparent allowance of GM Korea, and so made the situation worse.”

In fact, GM Korea achieved a sustained growth in sales since its initiation of Chevrolet brand in 2011, but since then salespersons left the company every year, numbering some 800 workers until now, that is one-third of the total employees.

A salesperson who joined the Sales Union complained that “Selling 10 Chevrolets should be rewarded with 10 million won at least, but due to below-cost sales allow only 2 to 3 million won,” and so they “got indebted with over 20 million won in one year of employment.”

He added that “Luxury car sellers of Porsche, and Mercedes-Benz, that priced over 100 million won, get the basic payment of 1.2 million won, but the Chevrolet models that priced at some 2 million won do not guarantee the basic payment or a small amount of allowance.”

GM Korea has five sole distributors throughout the nation, and they have several contracted sales agents, and so the salespersons at those sales agents are working as a self-employed workers. Such a system is different from Renault-Samsung that has both affiliated representatives and sales agents, or Ssangyong that has 100% sales agents.

The salespersons at the agents are working at inferior conditions due to abnormal sales networks and distorted sales practices, and even communication channels are completely blocked, and so there was no other choice but organizing a labor union.

GM Korea’s introduction of sole distributors is that the distributors first buy cars from GM Korea and then allot sales target to each sales agent, and then sales target to each salesperson, and so most profit return to GM Korea or the distributors.

The owners of sales agents and salespersons are getting a certain portion of the sales premium, which then divided by 6 to 4 for salesperson and the agent, respectively.

In 2012 the owners of sales agents filed a suit at the Korea Fair Trade Commission against GM Korea and its sole distributors on the argument of ‘unilateral allotment of sales targets and passing on the costs to salespersons.’

They also argue that some agents are selling abnormally through on-line networks and so sales premiums are increasingly ignored for salespersons.

So to speak, sales agents are getting more assistance allowance as sales increase, and so some owners of the agents are giving up sales premium by entering into on-line sales.

Furthermore, salespersons are not allowed to move freely to any other agents for better terms and conditions as relevant regulation prohibits re-employment within 6 months after resignation.

Chevrolet salespersons say that “They are sacrificing themselves as the GM Korea’s management has only sell-more attitude, and regional distributors’ have premium-only policies, while sales agents pursue only their own profits,” and so they are trying to “raise their own voices against such wrong business practices.”