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.