The Cost of Saving GM Korea? $2.8 Billion, Report Claims

Steph Willems
by Steph Willems

Amid frantic restructuring designed to keep General Motors’ money-losing Korean operations afloat, the automaker has proposed a $2.8 billion investment, a new report claims.

According to Reuters, a South Korean government official said GM would invest the funds over the span of 10 years, though not all of that money would come from the automaker’s coffers.

The country’s state-run Korea Development Bank (KDB) holds a 17-percent stake in GM’s Korean subsidiary, and is reportedly being asked to provide $476 million in investment. GM Korea announced the impending closure of its Gunsan assembly plant last week, but hasn’t yet decided the fate of three remaining plants in the country.

On Tuesday, Reuters reported on a seperate $2.7 billion debt-to-equity swap proposed by GM as a way of securing government support, as well as tax benefits. Part of the overall rescue plan includes the production of two new models in South Korea, one lawmaker said. The automaker hasn’t confirmed any of these proposals.

While the proposals seem promising, the government remains wary. South Korea’s trade minister, Paik Un-gy, said on Wednesday that the government wants an audit into GM’s “opaque” management in the country, CNBC reports. It’s hoped an audit will determine if GM’s proposals can truly save the operation.

“By opaque we mean the high rate of profits to raw material costs, interest payments regarding loans and unfair financial support made to GM’s headquarters,” Paik told reporters.

Meanwhile, GM’s 14,000 unionized Korean workers are prepared to strike if the automaker decides to pull up stakes in the country, labor boss Lim Han-taek said Wednesday.

[Image: Wikimedia Commons ( CC BY-SA 3.0)]

Steph Willems
Steph Willems

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  • Manic Manic on Feb 22, 2018

    Time to flog the dead horse off to someone. Chinese? Nope. PSA, again? They have enough capacity already. I saw current Renaults re-badged as something when recently in Seoul. Samsung Renault? Maybe they'd need some factories....

    • See 1 previous
    • Bd2 Bd2 on Feb 27, 2018

      @Big Al from Oz Samsung got out of the auto business - only retains a 19.1% share in Renault-Samsung which is subsidiary of Renault. The right to use the Samsung name runs out in 2020; remains to be seen if Samsung will grant Renault an extension (or if Renault has an interest in renewing).

  • Jeff S Jeff S on Feb 22, 2018

    @Manac--Tata Motors could be a potential suitor. At least the Daewoo cars do not catch on fire like the Tata Nano.

  • John Hummer owners don't care. Like shingles.
  • Wjtinfwb Funny. When EV's were bursting onto the scene; Tesla's, Volt's, Leaf's pure EV was all the rage and Hybrids were derided because they still used a gas engine to make them, ahem; usable. Even Volt's were later derided when it was revealed that the Volt's gas engine was actually connected to the wheels, not just a generator. Now, Hybrids are warmly welcomed into the Electric fraternity by virtue of being "electrified". If a change in definition is what it takes, I'm all for it. Hybrid's make so much sense in most American's usage patterns and if needed you can drive one cross-country essentially non-stop. Glad to see Hybrid's getting the love.
  • 3-On-The-Tree We also had a 1973 IH Scout that we rebuilt the engine in and it had dual glass packs, real loud. I miss those days.
  • 3-On-The-Tree Jeff thanks. Back in 1990 we had a 1964 Dodge D100 with a slant six with a 3 on the tree. I taught myself how to drive a standard in that truck. It was my one of many journeys into Mopar land. Had a 1973 Plymouth duster with a slant six and a 1974 Dodge Dart Custom with 318 V8. Great cars and easy to work on.
  • Akear What is GM good at?You led Mary............................................What a disgrace!
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