GM Likely to Transfer Production from Australia to Korea

It has been found that GM is mulling over increasing the production of GM Korea by absorbing that of its facilities in Australia, which are scheduled to be shut down. Once the plan goes as scheduled, it is expected to be a huge boon to GM Korea, which has had some headaches about the withdrawal of the Chevrolet brand from the European market. 

GM’s Executive Vice President of Consolidated International Operations (CIO) Stefan Jacoby met with Korean reporters on January 14 at the Marriott Hotel in Detroit and mentioned the move. Established in August last year, the CIO manages the overseas business of the automaker across the world excluding North America, China and Europe. 

“Our withdrawal from Australia will be an opportunity on the part of GM Korea,” he said, adding, “Although nothing has been fixed yet, we are giving serious thought to transferring the Australian production to Korea.” He mentioned the recently concluded Korea-Australia FTA and the high productivity of GM Korea as two of the reasons for such considerations. “I was very impressed by the workers’ skillfulness and high productivity during my visit to the Bupyeong plant last year,” he went on. 

Mary Barra, who is the Executive Vice President of Global Product Development, Purchasing and Supply Chain at GM and is slated to be inaugurated as its CEO on January 15 (local time), agreed to the remarks. “We think highly of the capabilities of GM Korea as the base of manufacturing of compact and mini cars,” she explained. 

GM Korea has tried hard to find new export destinations. Its efforts are expected to bear fruit once the shift is determined. GM’s annual sales volume in the Australian market is approximately 100,000 vehicles. 

Still, the top management of GM expressed some concerns over the high production costs of GM Korea. “We will focus on strengthening our financial structure by means of higher profitability,” she added, “Although it is true that GM Korea will play an important role in enhancing the brand and profitability of the Chevrolet brand down the road, it is also true that GM Korea produces the same product at a higher cost.”