GM Korea Co. and its labor union agreed to scale down its work shift at its struggling Gunsan plant, a move aimed to reduce costs amid falling overseas demand following its withdrawal from Europe, company officials said Wednesday.

The workers will go on a single work shift instead of the current double shift, but they have been assured of keeping their jobs through relocation to other duties, they said.

The two sides also agreed to lower the number of vehicles produced each hour from 54 to 48 as it tries to tide over challenges facing the Korean unit of U.S. carmaker General Motors Co.

The agreements were reached for the plant here that produces Chevrolet-badge vehicles after months-long negotiations between management and labor.

The Gunsan plant, located 274 kilometers south of Seoul, is operating at about 60 percent of its full capacity, affected by the pullout from the European market last year.

GM Korea saw its vehicles sales drop 19.2 percent on-year in 2014, due largely to a decline in overseas sales.

This raised the need to change into a single-shift system at the Gunsan plant, a move the company hopes would improve business efficiency and help get the nod from the headquarters to produce the next-generation Cruze. The change had been opposed by workers over potential massive layoffs. (Yonhap)