Continuous Rumors
There are rumors that GM Korea will withdraw from the domestic market once again. According to local media reports on April 24, rumors that GM Korea will leave the country have emerged as the company posted 530 billion won (US$469.9 million) in operating loss last year and recently announced a voluntary retirement program for its employees.
GM Korea is receiving applications for voluntary retirement from its office workers from the 3rd. This is the fifth voluntary retirement program for its office workers since 2009.
The company notified to its labor union that its voluntary retirement program aims to enhance business efficiency. Those who started to work at GM Korea before 2011, including assistant manager to director levels, will be eligible to apply for the program. The program is only for office workers, not production workers.
Meanwhile, some industry sources said that GM Korea is carrying out the restructuring program as its exports to the U.S. and Europe showed a sharp decline after the GM headquarters in the U.S. withdrew its Chevrolet brand from Europe.
In particular, the discontinuation of the Chevrolet Orlando is a sensitive issue to GM Korea as it is closely connected with its production facility. The Gunsan plant is mentioned as the first production base to be closed when GM Korea withdraws from the Korean market in phases.
There were also rumors that GM Korea will close down the Gunsan plant as the company switched the production line of the Chevrolet Cruze, which has recently released full-changed models, to the Bupyeong plant after the discontinuation of the Orlando.
Exports of GM Korea’s fully built cars decreased from 620,000 units in 2013 to 410,000 units last year. This was because the Chevrolet brand withdrew from the European and Russian markets since 2013.
As the production base of GM’s compact cars, GM Korea was in charge of exporting products to the European market but it is suffering from lackluster sales after the withdrawal.
An official from the industry said, “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.”