Reuters is reporting from “a source with direct knowledge of the matter” that General Motors plans to reduce shifts at its South Korean factories by half as it aligns its global manufacturing. The move could eliminate 1,100 jobs. GM had announced last month that it was discontinuing the Chevrolet brand in Europe by the end of next year and GM Korea produces many of the Chevy branded cars sold on the continent.
According to the report, GM Korea has already approached the union representing its production workers about reducing the current two shifts at the Gunsan factory to a single shift. That plant employs 2,200 manufacturing employees. It’s not clear if the surplus employees will be laid off, offered voluntary retirement or relocated to other facilities.
A GM Korea spokesperson declined to comment in detail, but confirmed that talks are under way about the Gunsan facility. That factory, one of four GM Korea assembly plants, currently produces the Chevy Cruze compact sedan and Orlando SUV. It has an annual production capacity of 260,000 units.
“The Chevy pullout would have a direct blow to the Gunsan factory. GM expects its production in Gunsan to shrink to 100,000 this year and 120,000 next year… The union wants to maintain two shifts, and instead cut the number of cars produced per hour,” the source said.
Mounting costs and labor unrest has caused GM to reconsider its reliance on South Korea for 20% of its global production.
While GM Korea’s operations will be used to supply the Australian market following the planned 2017 closure of GM’s Holden subsidiary’s assembly plants, analysts say that volume would not be enough to offset the production losses caused by pulling the Chevy brand out of Europe.