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| GM Executive Vice President Barry Engle visited Korea recently and gave Korean an ultimatum ― back its restructuring plan or the U.S. carmaker will leave Korea. Courtesy of GM |
By Oh Young-jin
GM Korea said it would close its factory in Gunsan, the smallest of its three factories in South Korea, by May. (See The Korea Times report on Feb. 7 http://koreatimes.co.kr/www/news/nation/2018/02/113_243726.html)
By all indications, the GM decision is the first salvo in a game of chicken between the U.S. automaker and Korean stakeholders such as the Korea Development Bank, its key shareholder, the unionized workers and the government.
"We have proposed to other stakeholders a concrete plan to stay in Korea and turn the business around, which requires the support of all GM stakeholders," a GM official told The Korea Times.
When asked whether it could be interpreted as the carmaker willing to exit Korea, she said the statement should be read as it is, nothing less or nothing more.
The carmaker has lost about 3 trillion won for the past four years, with the Gunsan factory working at 20 percent of capacity.
The tone of veiled threat was obvious as its visiting official declared the end of February deadline.
"The performance of our operations in South Korea needs to be urgently addressed by GM Korea and its key stakeholders," GM Executive Vice President Barry Engle said in the statement. "As we are at a critical juncture of needing to make product allocation decisions, the ongoing discussions must demonstrate significant progress by the end of February, when GM will make important decisions on next steps."
Last week, GM Chairman and CEO Mary Barra put Korea on notice.
"Clearly, Korea is a challenge for us … the current cost structure has become challenging and we are going to have to take actions going forward to have a viable business," Barra was quoted by WardsAuto, the online news outlet specializing in the auto industry, as saying. "Korea is the one we are most focused on."
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