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%). People thinking they know something (when they don't) is exactly why the country is in the shape it is today.

  • Tassos The EQS is the best looking BEV, better than even the only Tesla I would ever consider (the S) and more luxurious inside etc etcThe self driving features will come in handy when I'm 110 and my eyesight and reaction times start to suffer.But that's four decades away, and only Tim recommends 40 year old "used cars"
  • Tassos "Baby, Baby light my fire!""Oh God please give me a Kia Forte" --Janis Joplin
  • Tassos The fugly looks of any Subaru, and especially the non-sporty non-elegant, fugly, low-rent looks and interior of the WRX are alone a sufficient turnoff to never want to own one.One can be a 100% car enthusiast but ALSO demand a beautiful AND luxurious vehicle one can be truly proud of and which makes one very happy every time one drives it.The above is obviously totally foreign to Subaru Designers and managers.Αnd who cares if they sell all they make? this is 100% worthless bragging, since they hardly make ANY. ALL of Subaru's models together, all dozen of them, sell less than the top selling Toyota or Honda or even Tesla sells. ANd furthermore, if you have the intellectual horsepower to understand it, bulldude, which I am 99% sure you sure as hell do not, it is NOT about the sales units, it is not even about the sales revenue.It is all about the P R O F I T S.Am I going slow enough for you, bulldude?
  • Thehyundaigarage Am I the only one that sees a Peugeot 508?
  • Lou_BC I realized it wasn't EV's burning by the absence of the usual suspects.