Union Fears GM Might Leave South Korea, Analysts Say There’s Cause For Concern

General Motors recently sold Opel and Vauxhall to Groupe PSA and there are worries that GM Korea could face a more disastrous fate.

According to WardsAuto, leaders from the Korean Metal Workers Union are worried that GM’s decision to combine the leadership of its International region with its South America region could spell doom for Korean operations. GM Korea CEO Kaher Kazem attempted to ease their fears by saying the company isn’t planning to leave South Korea but everyone isn’t convinced.

As the publication points out, the Korea Development Bank owns 17.02 percent of GM Korea shares and that gives them the power to veto plans to downsize operations or sell off major assets. However, the veto power will expire on October 17th and that could give GM a free hand to make drastic changes.

This doesn’t mean GM will change anything but analysts believe the union has reason to be concerned as GM Korea has lost $1.7 billion in the past three years. The losses could show a need for cost-cutting measures and increasing productivity.

The decision to appoint Kazem as CEO of GM Korea hasn’t helped matters either as he was previously managing director of GM India. In his previous position, he oversaw the sale of assets to SAIC. This has led some union leaders to believe Kazem is a “restructuring specialist” who was appointed to his position to cut jobs ahead of a possible pullout.

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  • Dan Iosubescu

    Yeah!!! … GM don’t know how to build good cars so they go for EV , like tesla….

  • Ilbirs

    There’s something untold about how GM is being managed, something that maybe will scare the hell if we know the real thing. First it was Opel/Vauxhall being sold to PSA, then the operations in South Africa being shut down and the Indian ones being redirected to just export markets. Now we see theses rumors about South Korean headquarters being shut. How worse is GM’s management beyond what the general audience knows?

    • Benjamin B.

      GM betting on China and America.

    • eb110americana

      Not really much of a mystery. GM killed Oldsmobile, Pontiac, Saturn, Hummer, and Saab to make it through the financial crisis. Opel/Vauxhall has been hemorrhaging money for years, and Ford and Toyota are all pulling local operations out of Australia as domestic production is too expensive to compete with the Asian imports.

      Unless GM swaps its Korean plants for Chinese ones, I doubt they will pull out of Korea. Their small car business is one of the few global GM successes after taking over Daewoo. I have no idea how they would compete in emerging markets without their Korean operations.

      • Astonman

        You answered your own question earlier, “GM swaps its Korean plants for Chinese ones”

        • Benjamin B.

          South Korea is more expensive than other countries. It’s more Westernized and workers expect more. GM is indeed betting a lot on the wealthy Chinese and hoping poor Chinese will be okay building Buicks for their Communist Party political and business leaders.

      • Benjamin B.

        RIP Saab.

    • Andrew Riles

      Agreed….if Sth Korea goes, they will have basically shut down all their current facilities that build RHD vehicles….which doesn’t bode well for us here in Aus…..especially as Holden has just gone back to sourcing some models from Opel….

      The only glimmer of hope is that the Korean sourced Captiva will be replaced here by two US models in the Equinox and Arcadia, so maybe they are looking at a range of global models built in the US going forward…..

      • LeStori

        Only if you want to buy a GM vehicle. In reality once Holden is a full importer, its product will have to compete with everyone else on equal footing. There is little in their larder even in LHD . They have already gone broke in 2009 and the new company is the one selling off what is left around the world.

        You can always buy Japanese. They are a RHD country and the largest manufacturer in the world, Toyota, is Japanese. It would be a hard sell to convert Australia to LHD whilst Britain and Japan and India are still RHD.

        As an aside if truly autonomous cars hit the road then they will all be no hand drive.

        • Benjamin B.

          Holden Special Vehicles is nothing more than a company that does RHD conversions of Chevy Camaros. Like Lancia of Italy and Saab of Sweden, Holden’s days are numbered. I mean it could survive as an importer if GM starts making better products. Or if GM builds an affordable rwd muscle sedan. Ford is in a better situation as its lineup is much better. Most Australian Ford cars are from Europe I believe.

      • Benjamin B.

        Maybe Australia will be forced to make the switch to driving on the right?

      • Benjamin B.

        Australia could pass reforms and lower costs of manufacturing…

    • gary4205

      GM had owned Opel since 1926. It had been a maasive money loser for a very long time.

      I’m sure there is enough blame for that to go around. But no use losing money….just because.

  • GT

    GM have gotten out of many global markets, closed their Australian plant (next week) and sold the European operations. I expect a GM Korea closure announcement on October 18.

  • OdysseyTag

    GM clearly wants to be active solely in the Americas and China, that would be my bet. I’ve never seen such a (former) large player pull out and restructure in so many markets. But somehow I do think there’s a method to the madness. If they are going through corporate difficulties, it makes sense to prioritize and refocus to ensure their survival rather than letting it all crash and burn.

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