General Motors is reportedly shifting its South Korean production of the Chevrolet Aveo — the global twin of the Sonic — to China, after informing its Korean union on Thursday. As a result, the union is threatening to strike.
The shift in manufacturing cites rising wages as the major cause. At the same time, South Korea currently produces 40 percent of all Chevrolet models sold globally, including the Cruze, Orlando, Trax and Spark. Korea also produces the Buick Encore, and Opel Mokka.
General Motors even announced last year that it won’t build the next-generation of the Cruze compact in South Korea beginning in 2015.
At the same time, the company plans to invest $917 million each year in its Korean operations, starting this year to develop new vehicles and powertrains.
Comments
Is GM really thinking that it will conquer the world with “Made in China”?
Why not Walmart did. HA HA!
South Korea is a major American Ally, but the unstable North Korea makes future production risky. I prefer that GM move its high volume (and high profit) lines to America, and keep the low volume lines in South Korea until the two Koreas finish their talks (now in progress) obviously arranged by China.
Maybe China can create a deal where GM can open a small car assembly plant in North Korea (with lesser wages) and market them in China for a lesser price. China, and North Korea gains GM quality and reduced prices, while GM makes a new profit and a new partner. Only South Korea loses a bit in profits but gains peace.
If GM could establish assembly plants in Vietnam (once an enemy of America), then with China’s help GM can do the same in North Korea. We may see the two Koreas united by 2030.
For Korea to become an area of peace, the USofA would have to withdraw their troops from South Korea, and stop those menacing military execises on how to attack and conquer the North of the peninsula.
Until the leadership in N Korea changes there will be little reuniting.
The feeling there between the north and south are worse than it ever was here after the civil war. A lot would really have to happen to fix this issue. Vietnam was not good but it was much less complex.
The fact is this is a sign how bad things are in South Korea. We are so close to a death toll that the world has never seen.
As for blaming America you had really look at who the aggressor has been and still is N Korea with China’s blessing.
Not trying to get political but the reality is you have a nut of a nut of a nut who is starving his people to build weapons that are only going to be used to kill untold numbers and China just sits there while they could have stopped this years ago and lets it go on. If China wanted this to be stable they could take him out any time they like.
It is a shame as N Korea could easily become a great industry hub as N. Vietnam is becoming. This guy could lead his nation to prosperity and become a hero he father and grand father never were.
The Puzzling part is China could make a buck off of them going more industrial by selling them the machines and items they need to do so, but still make no move.
The next world war is already being fought with money plain and simple.
The danger is if we pull out South Korea would be slaughtered. After that Japan and Taiwan also would be at great risk.
GM just can no longer risk losing production of cars they will need in the future. The up side at least is that we will get more work here. It may hurt the price but it is at least work here if they can get anyone to take the jobs. Hiring good people who want to work with their hands anymore is difficult.
This move by the General doesn’t make sense… Invest a billion each year, while pulling production from Korea. If it’s a move to punish the Union, it will only create more bad blood.
The General is gambling high stakes poker in China, by giving the Chinese more production capability, just to secure lower wages. The deeper and deeper ties to China is a risky move financially. If politics go south with the US, and China… as I think they will, GM will lose billions. I hope the brass, and bean counters, have taken the worst scenario into consideration.