GM Korea is back in the headlines after new rumors have surfaced over the possibility of withdrawing from the South Korean market again, according to Business Korea.
The on and off rumors have been around for years, but the news of a $469.9 million posted loss last year have fueled speculation GM will begin to slowly phase its Korean manufacturing base out. The automaker has also begun a voluntary early retirement program, its fifth since 2009. Those who started work as office workers before 2011 will be eligible for early retirement, but production workers are not.
Sources say GM Korea will now begin carrying out a major restructuring program as the country’s exports continue to dwindle. GM Korea was tasked with building small cars and other Chevrolets for Europe and Russia. GM pulled the brand from both markets years back, leaving Korea in a tough spot.
Exports decreased from 620,000 units to 410,000 last year.
Again, the Gunsan plant is said to be first on the chopping block when GM Korea initiates its scale back of operations. An unnamed industry insider painted a dreary picture for operations if an export market isn’t found soon.
“When GM Korea fails to find a solution for export soon, it will have no choice but to reduce production. With GM’s global sales strategy, GM has actually lost major export markets, including Southeast Asia, and has difficulties in securing its markets. In short, GM is preparing for the withdrawal from the Korean market through the phased production reduction.”
Comments
Again, a further upcoming withdrawal! Obviously, Mary Barra and her team are overpaid to disguise theirs failures as successes: GM have to produce better global car, like Toyota which are sold all over the world!
As the saying goes “spare the rod and spoil the child”!
Most countries in the world their consumer buys from their own manufacturers except in America. This is the main reason our trade deals are not working. We have many Asian people living in American and a lot buy from Asian manufacturers. Most Americans living in S Korea and Japan are on Military duty, again that we American tax payers are paying for. Our universities have more foreign students then Americans. Why?
Most countries in the world do not have an automobile industry at all.
The OICA statistic of automobile production per country which I have cited and linked to in the thread on “Death Of Australian Automotive Industry Has Been A Calculated Slow Burn” lists just 38 countries with a significant automobile industry (plus lumping together I don’t know how many under “other”), out of about 200 countries members of the UNO.
So your contention can’be true.
On the contrary: in the vast majority of all countries, people buy only imported cars.
check http://www.oica.net/category/production-statistics/
Observer, China the largest market GM has to have a joint venture, can’t own anything. America the second largest GM has to compete with every major auto manufacturers. Japan is third largest without any foreign manufacturer in Japan. GM and Ford got kicked out in 1938. By the way we have almost 50,000 American military in Japan. We sell almost nothing in Japan. S Korea in the top 10, where GM bought a Korean company with very few sales in Korea. S Korea where we have around 30,000 military.
Again I was talking about the largest markets. Europe, GM Opel another German company they bought had less than 7% share.
GM and other foreign automobile companies do own property in China, they just have to enter into 50:50 joint ventures with Chinese companies. The foreigners bring their know-how, the locals the market and help set up the joingly owned production facilities. And that is good not only for China, but for all of humanity.
100 years ago, China was powerless prey to all big powers. By gaining her independence after the 2nd World War, i.e. by being “lost” both to the USA and to Japan, China is able to determine her own fate. China does what the USA herself did in its infancy of industry. She protects her infant industry, enabling growth, so that China, which represents about on fifth of humanity, is lifting all of humanity out of poverty. Every human being should support that. It helps us all.
Regarding your concerns about GM market share in Korea and Japan: I can’t imagine that Daewoo lost all its market share after becoming GMDAT, and GM Korea later, but sure, since I don’t understand Koran, I can’t get the hard facts.
As to Japan — well, when GM as one of the three largest auto makers worldwide even today still develops automobile architectures for driving only on the right side of the street, nobody should wonder that this makes sales in left driving Japan impossible beyond an interest in exotic cars. “Get real, GM”, I can only suggest. Nearly all countries circling the Indian Ocean plus two quite rich island settlements like Japan and the British islands drive on the left.
Regarding your concern for the US soldiers in East Asia — would it not be time to get them boys home? Bring them out of harm’s way, and avoid stumbling into the 3rd World War which threatens to annihilate not only humanity, but all organic life on this planet.
O7,
I guess you have no issues with the theft of intellectual property by China from all Western countries? Or the hacking of all schematics of the F35, F22 as well as all nuclear weapon systems going back to the 1980’s by the PLA. Or the multiple examples of the Chinese partners forming new partnerships to compete against Western companies they were initially partnered with. And I could go on. Are you also part of the 37% of Trump supporters who have a favorable opinion of Russia and Putin? Time to step out of your bubble?
BTW, Japan and Korea don’t buy foreign cars because they are both extremely nationalistic and they have significant barriers in place to discourage imports. More than 95% maket share in Japan. Seems they do more than wave their made in China flags like so many Americans do.
GM can’t make money outside the US and that includes China. Wait until the Trump factor kicks in. We have banned any US products in our household.
There making money some were not just in these us, outside of it.These sales in these us are slowing down.
90% of GM’s profit is made in the US yet they sell more cars in China which means they are making next to nothing outside the US.
Bring back Daewoo to life, and GM needs a real global strategy and global cars.
The Barra Doctrine is “cut and run” may it be Europe with Opel, Thailand, India (coming soon) & now Korea.
GM has the highest quality of the Detroit 3 yet is a company in contraction that may well get swallowed up by a rival.
GM needs growth. I’m starting to think a FCA merger might be a good idea.
FCA would be a drag on GM as it is so far from being a world class manufacturer. I know GM and Ford loyalists may find this to be a sacrilege, but Ford would be a better match. Both companies can work well together as was demonstrated on the 9 and 10 speed transmission projects.
If this becomes reality, it only reflects the changing weight of South Korea in the world economy, which is diminishing relatively with the rise of China.
I see as one of the signs of this the recent financial demise of Hanjin Shipping, once on of the world’s top ten container carriers in terms of capacity.
How the hell does GM consistently lose money in markets where it is in the top 5 for sales? Sometimes even at the top like some South American markets? When GM pulled out of Russia they Niva was the 4th largest seller in the market. No other car maker pulled out?!?!?! They sell like crazy in South America, yet lose money. WTF?
They did it for almost 20 years prior to bankruptcy. If my memory is correct, in 1990 GM had the largest loss to date of any company in history. Granted, it was a large company at that time.