General Motors Korea is projected to suffer losses once again this year due to ongoing partial and general worker strikes.
General Motors and the state-run Korea Development Bank bailed GM Korea out last year, with GM contributing $3.6 billion to struggling company and the KDB putting up an additional $750 million. The KDB also owns a 17 percent stake in GM Korea, giving the state good reason to ensure the automaker’s success.
But with GM Korea’s worker’s union staging sporadic strikes, the automaker is 10,000 vehicles shy of its projected output for this year – affecting vehicle supply both locally and abroad. At the same time, GM Korea’s sales are down 6.2 percent year-over-year between January and August. It hopes new vehicles, like the Chevrolet Colorado, Traverse and Camaro, will attract new buyers to the brand and it plans to continue adding new models to its Korean portfolio between now and 2023.
GM will be keen to solve the South Korean labor row, not only for the health of its Korean business, but for its North American one as well. With Korea handling output of the hot-selling Buick Encore and Chevrolet Trax and a potential strike between the UAW in the United States also looming, a downturn in Korean production could compound with a work stoppage in the US and have an affect on crossover supply. GM Korea will also build the upcoming new Chevrolet Trailblazer and Buick Encore GX models, which will be exported to the US as well.
GM Korea posted a loss of 859 billion won ($738 million USD) last year, the fourth straight year of losses for the company, reports Korea Bizwire. It reported net losses of 3.13 trillion won ($2.6 billion) between 2014 and 2017 as well. The automaker’s struggling business is making it hard to meet union demands, it says, which entail higher wages and increased bonuses, among other concessions.
Source: Korea Bizwire