GM plans to gradually withdraw from South Korea

According to informed sources, GM plans to gradually reduce its business performance in South Korea, mainly due to higher labor costs in South Korea and a more radical trade union attitude.

According to three sources, with the rising cost of labor in South Korea, labor unions have a strict attitude toward auto companies, and General Motors is revisiting South Korean operations and gradually reducing production of new models in South Korea. Previously, GM said that it will not produce a new generation of Cruze compact cars in South Korea. The production capacity of Xinaiwei Europe in South Korea may also be transferred to China and other places. The Opel Mokka small car will be delivered to the Spanish factory.

One person pointed out: "GM must ensure that we reduce the risk in Korea, not only in the next two to three years, but over time, we cannot rely too much on a single source of manufacturing. Whether it is cost, politics or trade unions, if One of the above factors is currently having problems in South Korea and it will immediately (affect GM)."

The increase in manpower costs in South Korea is an important factor in the slow withdrawal of Universal. According to data from the Organisation for Economic Co-operation and Development (OECD), from 1999 to 2009, South Korea's manufacturing per capita total labor force salary surged by 119%, while the United States and the euro area increased by 40% and 27% respectively.

At present, South Korea has an important position for General Motors, which accounts for one-fifth of the global output of the automaker and occupies one-quarter of the global production of the Chevrolet brand. It is also a design base for GM's small vehicles. GM South Korea has five production plants and currently produces six models. In the future, these models will be upgraded, including global minicars, small cars and midsize cars. Of the vehicles that General Motors Korea produces each year, 145,000 are sold to local Korean consumers, and another 1.3 million are exported, including the U.S. market.

Another source said that due to the strengthening of the Korean won, the recent situation in the Korean Peninsula is tense. GM believes that there are too many exposures in South Korea and it needs to be reassessed to ensure the safety of people and property.