GM Restructuring South Korea Operations
Photo via Julie Roberts/Max Pixel.
General Motors will close one of its four South Korea factories by the end of May as part of a restructuring of its operations in the country to make its business more profitable.
The plant that will close in Gunsan on the country's western coast near the Yellow Sea has been producing the Chevrolet Cruze sedan and Orlando utility vehicle mostly for the South Korean market. The plant produced 33,983 vehicles in 2017, including 10,603 for export to countries such as Indonesia, Australia, Cambodia, and the Philippines.
"We have sustained significant losses for the past several years due to fierce domestic competition, changes to export markets, stringent regulations and unsustainable fixed costs," said David Albritton, a GM spokesman. "This requires GM Korea to make fundamental changes urgently. In order to turnaround the business and make GM Korea a profitable and viable operation, we need to take significant actions urgently, together with key stakeholders."
General Motors has submitted a plan to the labor union and other stakeholders to "stay in Korea and turnaround the business," Albritton said. The parties must support the plan by the end of February.
GM Korea has produced 10 million vehicles since it began operations in 2002. In 2017, it sold 132,377 vehicles in South Korea and exported 392,170 vehicles to 120 other countries.