“GM’s future plans may result in some rationalization actions or restructuring that potentially could have a material impact on our results,” said General Motors CEO Mary Barra on February 6. Regarding this comment, Bloomberg reported that GM is likely to do something very drastic about GM Korea, possibly an outright exit, given the prior history of GM.
The prior history means the worldwide restructuring of GM that has continued for years. Since late 2013, GM has withdrawn from the European and Indian markets, shut down its factories in Australia and Indonesia, cut or stopped production in Thailand and Russia, and sold Opel. The Chevrolet brand has withdrawn from South Africa, too.
In the meantime, unionized GM Korea workers interpreted the comment differently. According to them, her comment means some measures other than a complete withdrawal from the South Korean market and the measures are likely to include shutdown of GM Korea’s Gunsan plant and layoff of its employees.
The plant, which has approximately 2,000 workers, has been operated for less than a week a month for about a year while 80% of their average wage has been paid to each of them. GM Korea’s current net loss amounted to approximately two trillion won (US$1.8 billion) from 2014 to 2016 and the amount reached 600 billion won (US$540 million) in 2017 as well.
“According to the GM headquarters, GM Korea should cut costs to survive on its own and accept various business rationalization measures to make a profit,” said one of the workers, adding, “This is what has been repeatedly mentioned by the top management of GM Korea and her recent comment shares the same meaning.”