Two New Models Coming to Save GM Korea: Report

Steph Willems
by Steph Willems
two new models coming to save gm korea report

The home of America’s smallest General Motors vehicles is bleeding sales and cash, forcing the automaker into harsh measures in an attempt to save its South Korean operation. Many fear last week’s plant closure announcement is just the beginning of an eventual exodus from the Korean market. There’s three remaining assembly plants, each sitting on shaky financial ground.

Today brings encouraging news, however. Two reports paint a picture of GM in triage mode, doing everything in its power to stem the bleeding — of both money and customers.

According to Reuters, a South Korean lawmaker claims GM International president Barry Engle promised members of parliament two new vehicles in a Tuesday morning meeting. South Korea owns a 17-percent stake in GM Korea, and it isn’t clear whether the product promise hinges on government support.

With 2,000 jobs already in jeopardy at GM’s soon-to-be shuttered Gunsan plant, and worker unrest growing, government intervention seems inescapable. On Monday, Reuters reports, South Korean President Moon Jae-in told his administration to assist in economic development efforts in the manufacturing region surrounding the plant.

Moon said the government will “aggressively” pursue these measures, which may include designating Gunsan as an “employment crisis area.” Such a label would allow for cheap business loans and support for laid-off workers.

On Tuesday morning, another Reuters report, citing four sources close to the matter, claimed GM plans to erase $2.2 billion in debt by converting it to equity. This would be done in exchange for “financial support” and tax benefits from Seoul. One source says GM wants $1 billion in support from South Korea, while another claims GM demanded its factory sites be labelled “foreign investment zones,” thus making them eligible for tax breaks for a period of seven years.

Though GM Korea’s domestic sales have fallen severely, it still exports vehicles to markets around the world, including North America. In his meeting with lawmakers, Engle said he’d like to see production continue at its current rate (roughly half a million vehicles per year). The Chevrolet Spark, Sonic, Trax, and Buick Encore all hail from South Korean plants.

[Image: General Motors]

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  • Deanst Deanst on Feb 20, 2018

    When did sonic production move from the u.s.?

    • See 3 previous
    • Festiboi Festiboi on Feb 20, 2018

      The U.S. market Chevy Sonic is still assembled in Orion, Michigan. That’s one of the little car’s claims to fame. But overseas market Sonics, and the identical Holden Barinas, are built in Korea

  • TwoBelugas TwoBelugas on Feb 20, 2018

    I know some immigrants from Korea, and the ones that do have Hyundai or Kias, as soon as they have enough money they start buying Lexus's and MBs. Some of them go as far as not wanting Korean brand cars altogether. Let GM Korea fail, it's not like Koreans as a whole buy all that many non-Korean brand cars anyway even if the GM cars are made there.

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

      According to my tour guide in Seoul last summer, 85% of cars sold in S Korea are domestically produced. To abandon the factory is to abandon the market.

  • Jeff S Corey--We know but we still want to give our support to you and let TTAC know that your articles are excellent and better than what the typical articles are.
  • Jeff S A sport utility vehicle or SUV is a car classification that combines elements of road-going passenger cars with features from off-road vehicles, such as raised ground clearance and four-wheel drive.There is no commonly agreed-upon definition of an SUV and usage of the term varies between countries. Thus, it is "a loose term that traditionally covers a broad range of vehicles with four-wheel drive." Some definitions claim that an SUV must be built on a light truck chassis; however, broader definitions consider any vehicle with off-road design features to be an SUV. A [url=https://en.wikipedia.org/wiki/Crossover_(automobile)]crossover SUV[/url] is often defined as an SUV built with a unibody construction (as with passenger cars), however, the designations are increasingly blurred because of the capabilities of the vehicles, the labelling by marketers, and electrification of new models.The predecessors to SUVs date back to military and low-volume models from the late 1930s, and the four-wheel drive station wagons and carryalls that began to be introduced in 1949. The 1984 [url=https://en.wikipedia.org/wiki/Jeep_Cherokee_(XJ)]Jeep Cherokee (XJ)[/url] is considered to be the first SUV in the modern style. Some SUVs produced today use unibody construction; however, in the past, more SUVs used body-on-frame construction. During the late 1990s and early 2000s, the popularity of SUVs greatly increased, often at the expense of the popularity of large [url=https://en.wikipedia.org/wiki/Sedan_(automobile)]sedans[/url] and station wagons.More recently, smaller SUVs, mid-size, and crossovers have become increasingly popular. SUVs are currently the world's largest automotive segment and accounted for 45.9% of the world's passenger car market in 2021. SUVs have been criticized for a variety of environmental and safety-related reasons. They generally have poorer fuel efficiency and require more resources to manufacture than smaller vehicles, contributing more to climate change and environmental degradation. Between 2010 and 2018 SUVs were the second largest contributor to the global increase in carbon emissions worldwide. Their higher center of gravity increases their risk of rollovers. Their larger mass increases their stopping distance, reduces visibility, and increases damage to other road users in collisions. Their higher front-end profile makes them at least twice as likely to kill pedestrians they hit. Additionally, the psychological sense of security they provide influences drivers to drive less cautiously. https://en.wikipedia.org/wiki/Sport_utility_vehicleWith the above definition of SUV any vehicle that is not a pickup truck if it is enclosed, doesn't have a trunk, and is jacked up with bigger tires. If the green activists adhere to this definition of what an SUV is there will be millions of vehicles with flat tires which include HRVs, Rav4s, CRVs, Ford Escapes, Buick Encores, and many of compact and subcompact vehicles. The green movement is going to have to recruit millions of new followers and will be busy flattening millions of tires in the US and across the globe. Might be easier to protest.
  • Sckid213 I actually do agree that most Nissans are ultimately junk. (I also think many BMWs are also). I was talking challenging the 3 in terms of driving dynamics. Agree all were failures in sales.
  • THX1136 More accurately said, we are seeing exponential growth in the manufacturing capabilities in this market. Unless, of course, all those vehicles are sold with customers waiting until more a produced so they can buy. Indeed, there are certainly more EVs being purchased now than back in 2016. Is demand outstripping manufacturing? Maybe or maybe not. I sincerely don't know which is why I ask.
  • ToolGuy The page here (linked in the writeup) is ridiculously stupid https://www.tyreextinguishers.com/how-to-spot-an-suvLike, seriously stupid, e.g., A) Not sure that particular Volvo is killing the planet as quickly as some other vehicles we might choose. B) A Juke is "huge"??? C) The last picture shows a RAV4 Hybrid?
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