South Korean Minister of Trade, Industry & Energy Baek Woon-kyu said on February 12 that he had asked GM Korea to inform him of how it will improve its business in the long term. His remark came out at a small business and venture committee meeting of the National Assembly on the de day.
His remark reflects the South Korean government’s stance on its financial support for the company’s recovery. According to the government, GM Korea should disclose data related to its business and come up with a long-term business improvement plan before asking for any financial support.
The minister also said that he met with GM International President Barry Engle in South Korea last month and discussed the same issue with him. “The current huge losses of GM Korea can be attributed to the company’s lack of competitiveness and we discussed how much investment the company can make in the long term and how it will improve its business structure,” he explained, adding, “However, we discussed nothing about the South Korean government’s support for an increase in GM Korea’s capital and foreign investment zone designation.”
At present, the General Motors HQ is urging the South Korean government to provide loans, cut taxes, and take part in its capital increase, implying shutdown of GM Korea’s plant located in Gunsan. GM Korea, in the meantime, is planning to persuade the HQ not to do so once unionized workers agree on the management’s plan to deal with the company’s high-cost structure. The plant has remained closed since February 8 after its capacity utilization stood at 20%.