Category: Korea

By on April 26, 2018

The Buick Encore isn’t going away anytime soon. Built by GM Korea, the little crossover, its Chevrolet Trax twin, and the diminutive Chevy Spark will continue chugging out of the country’s three GM assembly plants and making a boat ride to the U.S., all thanks to a multi-billion dollar turnaround deal.

Faced with declining domestic sales and reduced exports, GM’s Korean division appeared on the edge of bankruptcy last week. A warring union resistant to the division’s wage and bonus demands and a hesitant South Korean government didn’t help matters. On Monday, however, the union representing 26,000 workers agreed to the automaker’s wage and bonus concessions. Members approved the deal today.

With GM’s end of the bargain — free up $600 million in operating funds — now complete, the taps can start flowing. There’s now $4.35 billion earmarked to turn the troubled automaker around. Read More >

By on April 23, 2018

2017 Buick Encore

If you spent the weekend in a state of breathless suspense, allow us to let some air out of that balloon. General Motors’ embattled Korean division, source of America’s smallest GM cars, has pulled back from the brink of bankruptcy after reaching an 11th hour deal with its union.

The tentative bargain opens the door to government assistance for the money-losing automaker, and should keep wee little vehicles rolling out of the country’s assembly plants. Read More >

By on April 20, 2018

Image: General Motors

As April 20th dawns without a wage deal with its workforce, General Motors’ troubled Korean division could be well down the road to bankruptcy.

GM Korea, which recently announced the closure of an assembly plant amid a continued loss of sales and money, needed to reach a deal with its 16,000 workers by today’s date in order to gain assistance from the South Korean government. The division builds the Chevrolet Spark, Trax, and Buick Encore for U.S. customers. Since revealing its restructuring plan back in February, GM Korea failed to gain much-needed wage concessions from its aggressive labor union.

Without this, bankruptcy might be the only option, the automaker claims. Read More >

By on April 9, 2018

Image: General Motors

Last week it was the subcompact Chevrolet Sonic and a report that the little four- or five-door could bite the dust by the end of this year. Now we hear the Spark — General Motors’ smallest U.S. offering — could also be on its way to the nameplate graveyard.

Oddly, the Reuters report, which cites a GM Korea spokesman, comes just a few days after the unveiling of the refreshed 2019 Spark. Like other Gamma II platform small vehicles, the Spark comes to us by way of Korea. As you know, that embattled division is currently struggling for survival, and it doesn’t much like the look of America’s falling Spark sales.

So, what would replace the Spark and give GM Korea’s threatened factories a safer product bet? You already know the answer to this. A crossover. Read More >

By on April 6, 2018

General Motors workers in South Korea forced their way into company executive offices on Thursday, destroying furniture in response to news that the automaker’s local unit told employees there will be no bonuses due its ongoing cash crisis.

Based on video evidence, the incident itself was weirdly organized, with just a hint of underlying fury. As tables were carefully moved out of the office, perhaps to be destroyed elsewhere, union members tossed chairs, glasses, and the CEO’s various knickknack to the ground. There was also some light smashing of a cabinet and the trampling of a blazer, which was later carefully dusted off and removed from the room by an employee. The whole affair was closer to the hiring of a budget moving crew than a full-blown riot.  Read More >

By on March 27, 2018

2015 Hyundai Santa Cruz Crossover Truck Concept - Image: Hyundai

The United States and South Korea reached a free trade agreement on Monday that spared the Asian country from punitive steel tariffs, assuming Seoul keeps an eye on just how much steel it sends to American buyers.

A quota on Korean steel exports means the country can only sell 70 percent of its recent average (2015-2017) to the U.S., though it is hardly Korea’s largest export market. The deal, reached “in principle” ahead of both countries’ meetings with North Korean leader Kim Jung UN, will also see South Korea raise the limit for U.S.-made vehicles that needn’t conform to local safety standards from 25,000 to 50,000.

It’s good news for the Trump administration, but not everyone’s thrilled. Hyundai’s union is hopping mad that a steep tariff on Korean-built pickups — which was set to expire in 2021 under the previous agreement — was just renewed for another 20 years.  Read More >

By on March 27, 2018

South Korea’s powerful labor unions have the ability to make vehicle assembly a non-starter, and the country’s workers have been known to strike like it’s going out of style. Just ask Hyundai about that.

As it seeks to bring its operations in the country back from the brink, General Motors would prefer to see its workers’ union bend to its will, agree to the concessions demanded of it, and generally get out of the way. This isn’t happening, so GM’s now playing hardball.

Agree to our cost-cutting plan, the automaker says, or GM Korea declares bankruptcy. Read More >

By on March 5, 2018

Union officials have stated that roughly 2,500 workers from General Motors’ South Korean unit have applied for a redundancy package offered as part of the automaker’s comprehensive restructuring of the region. The number represents around 15 percent of total GM staff in the area and should make negotiations with one of the most inflexible workers’ unions on the planet that much easier.

Still, what General Motors plans to do with its remaining South Korean factories is unknown, but it has already announced one closure. This has left many wondering if the automaker will abandon production in the country entirely. Fortunately, the Korean workforce has not responded with violence. In fact, many appear to see the writing on the wall, opting to take a buyout rather than cause a fuss during the restructuring.  Read More >

By on February 21, 2018

Image: Wikimedia Commons

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. Read More >

By on February 20, 2018

2017 Chevrolet Sonic

 

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. Read More >

By on February 19, 2018

General-Motors-Gunsan-South-Korea-Plant-Chevrolet-Cruze-Production-01-720x513

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. Read More >

By on February 13, 2018

General Motors has announced plans to close one of its four South Korean assembly plants in an effort to stem a tsunami of red ink.

As it attempts to stabilize (or cut) unprofitable overseas operations — an effort that led to the sale of its European Opel and Vauxhall brands last year — GM will close its Gunsan, South Korea plant by the end of May. That facility, which employs 2,000 workers, builds the Chevrolet Cruze sedan and Orlando MPV, a boxy, three-row vehicle that almost made it to American soil. Read More >

By on October 31, 2017

2018 Hyundai Sonata Sport - Image: Hyundai

When it comes to the positively frosty relationship between China and South Korea, this is the part of the movie where the two countries bump into each other at the bookstore and realize they should work out their troubles instead of giving each other the silent treatment. You know, for the kids.

For South Korea, China’s decision to warm up the relationship — which soured after the jittery country placed U.S.-supplied defensive missiles on its soil — is the best news its auto manufacturing sector has heard in ages. Perhaps soon it won’t be frowned upon to own a Hyundai or Kia in Beijing. Read More >

By on October 27, 2017

Ssangyong SIV-2, Image: Ssangyong Motor

Hyundai and Kia did it, so why not Ssangyong? The India-owned Korean automaker has been itching to expand its horizons for years, but tentative plans to invade the Chinese car market have fallen victim to bad timing and geopolitics. Now, the company’s board is weighing a U.S. entry.

It’s not the first time Ssangyong Motor, owned by Mahindra & Mahindra, has eyed the United States for a big volume boost. Early last year, the automaker and its parent company temporarily shelved a proposed 2019 U.S. expansion plan, with Ssangyong’s CEO warning it could “make or break” the company.

Well, the idea’s back. With Ssangyong eager to land on American shores by 2020, a new report says the company has already made its decision. Read More >

By on October 4, 2017

South Korea Chevy Malibu 2015

Officials from the United States and South Korea held a special session in Washington on Wednesday as part of U.S. Trade Representative Robert Lighthizer’s request to consider amending the two countries’ trade agreement. The joint talks serve to reassess the countries’ five-year pact, with the Trump administration aiming to diminish America’s growing trade deficit with South Korea.

One of the largest issues concerns the automotive industry. Korean rules stipulate a cap on the number of vehicles U.S. automakers can bring into the country each year that adhere to the country of origin’s safety standards. Presently, that quota sits at 25,000 vehicles per manufacturer. However, no U.S. company has ever made full use of the quota. General Motors, which is the most popular U.S. brand in South Korea, only sold 13,150 domestically built units in 2016.  Read More >

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