GM Korea’s Global Strategy
The labor union of GM Korea issued a statement on December 10, criticizing the decision by GM’s top management to stop selling its Chevrolet-branded vehicles in Europe by the end of 2015.
The union workers claimed that the company held a board of directors meeting last week and unilaterally informed workers of its decision without any prior consultation, saying, “This can only be seen as an action to deceive the 15,000 workers here.”
GM Korea said on December 5 that it revised its global strategy to only sell its Opel and Vauxhall vehicles in Europe, which are well received by consumers. To the contrary, the market share of Chevrolet-branded models remains at around 1 percent in Europe.
The union claimed that the stopping shipments of Chevrolet models to Europe can bring about restructuring and job insecurity for employees, while the company said that it will instead boost marketing efforts in Russia and the Commonwealth of Independent States.
The union said, “The company needs to prepare for any fallout that may occur,” stressing that the company needs to do more to expand into new markets by launching new vehicle models and aggressive marketing activities.
The company’s management already said after last week’s board decision that it will do its utmost to limit the repercussions to its Korean operations, and that it had no plans at the moment to push forward with restructuring.
Despite the announcement, workers are worried that the company may start laying off office workers first soon and possibly extend the cuts to other sectors.
Related to GM’s global strategy, Korea Development Bank (KDB), a large shareholder of GM Korea, said on December 10 that it has reviewed the plan and has already asked the company to provide documents so that it can inquire into the cause of this year’s weak performance in Europe. The company is expected to produce some 800,000 vehicles this year, but this number may reportedly be scaled back to 650,000 in 2015.
At present, GM holds a 77 percent stake in its local subsidiary. The state-run KDB has a 17 percent share, more than the minimum requirement (15 percent share) to veto any decision made by the management.