As automobile factories are shut down in the United States and Europe due to the COVID-19 virus spread, GM Korea and Renault Samsung Motors are likely to take a beating.
GM Korea has been importing the Traverse and the Colorado from its parent company for sales in Korea. Yet the extended shutdown of GM’s North American plants is likely to put the brakes on sales of these models. GM has not yet clarified when to reopen the North American plants. The lockdown could be prolonged. GM Korea has these models in stock so there is no immediate impact. But auto industry insiders expect that if the U.S. COVID-19 outbreak is prolonged, GM Korea will be affected in the long run. The Traverse and the Colorado are produced at GM's Michigan and Missouri plants.
Recently, GM announced that it would cut salaries of 69,000 employees worldwide by 20 percent. GM Korea’s workers are anxious over a possible salary cut. Recently, the labor and management of GM Korea reached a tentative agreement on wage bargaining for 2019. The GM Korea labor union is voting on the provisional agreement over two days from March 30 to 31. However, the salary cut news from GM led unionists to question whether GM Korea will keep the provisional agreement.
As Renault of France stopped operating all of its 12 factories indefinitely, it sounded the alarm for Korea’s Renault Samsung Motors as it imports about 2 percent of its parts from Europe.