General Motors will not shift production of European-market Chevrolet vehicles from South Korea to Europe, according to a company executive.
“Are we looking at [it]? We always do. But do we have anything? No,” said GM Korea CEO Sergio Rocha at the Busan auto show in South Korea on Thursday.
The automaker officially announced that it was “studying production of Chevrolet models in Europe” in its ten-step plan to restructure its European arm Opel and return the unit to profitability after nearly a decade of losses.
According to a report from Automotive News, “South Korea’s traditionally militant trade unions are said to have threatened “war” with GM if it shifts output of Chevrolet models from Korea”.
Opel’s ten-step plan outlining Opel’s planned restructuring stated that “building Chevrolet vehicles in Europe to improve capacity usage” is under consideration. Capacity utilization of a plant is key for an automaker to reach the financial break-even point and — subsequently — profitability; Opel’s current plant utilization in Europe is widely below those levels due to slumping automotive demand in the region associated with declining economic conditions.
Earlier this month, it was rumored that GM will shutter its manufacturing operations in Korea in favor of moving production to either Europe or China. In addition, the automaker announced earlier this week that it is expanding advanced design and engineering operations in Incheon, Korea by the end of 2012.
The GM Authority Take
Perhaps Mr. Rocha’s comments say it all: GM’s business is always changing — especially in today’s tumultuous restructuring period. So while The General may have decided against moving production of Chevy cars from Korea to Europe this week, the decision may change come next month. In other words, only time will tell…