Last Thursday, General Motors announced that its labor costs in South Korea had risen by almost 50 percent over the past 5 years; but that’s not the only factor which threatened production in the Asian country.
GM had previously announced Chevrolet’s intention of pulling out of the European marketplace entirely, and according to The Economic Times, the majority of Euro-market Chevrolet vehicles were produced in South Korea’s four GM plants. That was enough to frighten many into thinking that GM Korea’s production, like that of Indonesia and Thailand, would face either a dramatic back-scaling, or a complete cessation.
But GM Korea Chief Executive Sergio Rocha states that General Motors has no such plans, at least in the near-term. “Never say never, okay? But we are not saying that we have any plans to shut down any operations here,” Rocha said in an interview at the Seoul Motor Show. But, he added, “it is very important for Korea Inc. to make sure that we address the competitiveness of our labour costs, which are spiking to certain levels, that may impact our sustainability.”
General Motors produces somewhere around one-fifth of its global output in South Korea, according to The Economic Times, but it has flagged the country as one of its “high cost” production bases. Labor unions have so far blocked GM Korea from shut downs that otherwise might have occurred due to Chevy’s retreat from Europe, part of the slack in plant capacity being taken up by the introduction of the Chevrolet Trax to the North American market.
Comments
Uh the Chevrolet Trax for the North American market is made in San Luis Potosi Mexico.
The new Spark which might lift sales and the Encore are made in South Korea.
Shutting down production in Australia is likely going to shift more production to South Korea.