South Korean President Miffed Over GM Plant Closure, Fearful of the Future

Matt Posky
by Matt Posky
south korean president miffed over gm plant closure fearful of the future

South Korean President Moon Jae-in says General Motors’ decision to shut down its Gunsan plant will negatively impact the region. He’s hoping his administration can work some impressive mojo to boost economic activity in the area, but admitted that GM’s quick exodus could make that tricky. There are also concerns that the automaker may soon decide to close down its remaining three plants within the country, leaving 16,000 South Koreans without employment.

“Especially, the decline in employment [at GM] and subcontractors will be difficult to bear for Gunsan City and North Jeolla province,” Moon said in a statement released by his office.

However, things haven’t been going well for GM in the region. The company said it shuttered the plant after it became increasingly underutilized — running at about 20 percent of its total capacity over the last three years. Meanwhile, GM President Dan Ammann claims Korean labor costs have increased by over than 50 percent since 2010. Worker productivity is also abysmal. It takes roughly three hours longer to build a single car in GM’s Korean facilities than it does in the U.S., and Korean strikes are becoming commonplace.

General Motors doesn’t want to outright abandon South Korea, but shrinking sales haven’t helped. Likewise, a lot of the product produced within the country hasn’t fared well as exports. Ultimately, the reduced profitability is what forced the decision to close the plant and may cause further cutbacks within the region.

According to Reuters, a GM Korea spokesman said Monday that the company is committed to supporting the affected workers. The U.S. automaker launched a voluntary redundancy program last week for its employees in that country. Meanwhile, workers at the Gunsan factory called the shutdown a “death sentence” and threatened to strike — not that it would make one bit of difference.

Moon requested that his government be uncompromising in its ongoing trade talks with the United States, voicing serious concerns over curbs on imports recently imposed by the nation. “Due to the expansion of U.S. import curbs on our export products like steel, electronics, solar panels and washing machines, I worry about our exports as a whole despite our international competitiveness,” Moon said. “I ask the government to act firmly and sternly to unreasonable protectionist measures, such as by lodging complaints to the World Trade Organisation and checking for violations of the U.S.-South Korea free-trade agreement.”

General Motors is expected to make a decision on its remaining factories in South Korea in the coming weeks. Whether or not it decides to close them, it has confirmed that extensive restructuring will have to take place if it is to remain in the country.

[Image: General Motors]

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  • Conundrum Conundrum on Feb 19, 2018

    GM is planning to rule the world with Wuling vans, foreign Buicks and Chev/ GMC pickups. So Daewoo is out. Buy your classic Sonic or Spark before South Korea joins Germany and the UK on the scrapheap of GM product planning. Cannot imagine how silver-tongued that de Nysschen guy is, still spending billions on Caddies that don't sell. The GM board will be after him next, and the baristas in Soho will threaten a wildcat strike.

    • Peter Gazis Peter Gazis on Feb 20, 2018

      Cadillac sold 356,000 vehicles worldwide last year. 156,000 of those were in the U.S. The 2 new Crossovers(XT4,XT6) and redesigned midsized sedan (CT5) will definitely boost those numbers. The new Cadillacs are being designed with RHD in mind. Getting ready for a big product push into England, Australia & Japan.

  • Agroal Agroal on Feb 19, 2018

    SK and NK are now BFF marching together at the Seoul Olympics. SK forgets that the only reason they can flood US markets with their economic giants like Hyundai, LG, Samsung, and Kia is because America still defends the Korean peninsula 70 years on. If SK is now OK with the recent NK ICBMs flying over their country then let's bring the 38,000 US troops home and let them defend themselves. Ungrateful dog eaters.

    • See 1 previous
    • Bd2 Bd2 on Feb 20, 2018

      First off - let's get the FACTS straight. SK annually pays around $800 to 900 million a yr towards the upkeep of US forces in Korea, on top of purchasing Billions of dollars of US military hardware. SK also paid for most of the construction and relocation costs for the new US base south of Seoul (Camp Humphreys) totaling around $9-10 billion. Also, the SKoreans are under no delusions that little fat boy in NK is not a danger, but at the same time, one doesn't try to incite that danger (like what Drumpf does) and have to do things to de-escalate tension on the peninsula. As for view of the US, SKorea has one of the HIGHEST % of having favorable viewpoint of the US with a 75% favorable rate according to Pew Research (was higher in 2014 with an 82% favorable rating). That's not only significantly higher than Japan (57%), but countries like Australia (48%), the UK (50%), Germany (36%), France (46%) or Canada (43%). http://www.pewresearch.org/fact-tank/2017/08/23/in-global-popularity-contest-u-s-and-china-not-russia-vie-for-first/ People thinking they know something (when they don't) is exactly why the country is in the shape it is today.

  • Redapple2 C2 is the best. C3 next. Then C7 (looking at you jimII).
  • Jeff S Vulpine--True the CAFE rules are for ICE.
  • Gray I grew up in the era of Panther and Fox platforms. If only they developed a good looking two door Conti. The four doors became a cult in their own right. And kept the 351W as a top line option.
  • Vulpine ABSOLUTELY YES!!! Bring back the TRUE compact trucks. The demand for them is far higher than the OEMs want to admit.
  • Brn More likely, with Google having troubles, the money tree isn't as ripe as it once was and cutbacks are needed.I hope the overall industry continues to evolve. When I get the the point I can't easily drive, I would still appreciate the independence that autonomous vehicles can bring.
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