Challenge to GM Korea
GM Korea’s sales are on the decline to the point of making the company worried about keeping its place in the Korean market. The labor-management disputes in the company are showing no signs of settlement, either.
The growth of the automaker, which fared well in the first half with its Malibu Diesel, turned negative month-on-month in August and amounted to negative 12.5 percent last month. This is because the sell-through of its three most popular models except for the Malibu – Spark, Cruz, and Damas/Rabo – dropped for three to five months in a row. During the most recent one-year period, the domestic sales volume difference between GM Korea and Renault Samsung Motors below it decreased from 8,799 to 3,776.
Things are even worse on the export side. GM Korea’s export volume has dropped each month all the way since the beginning of this year to reach 437,245 cars, 23.9 percent down from a year earlier, as of the end of November.
Sluggish sales have led to production cuts, which, in turn, has resulted in labor-management conflicts. Earlier last month, top management met with the labor union to explain that the model to follow the Malibu will be manufactured in Bupyeong Plant 1, Gunsan Plant will be converted to a single shift, and a voluntary retirement program will be started soon.
According to the management, the company cannot but lose 40 billion won (US$36.0 million) a year if the Gunsan Plant maintains its double daytime shift. If the plans are carried out, the Gunsan Plant, only 60 percent of which is in operation these days, has to lay off employees again. Earlier this year, the number of its subcontractor workers in the factory was cut from 1,026 to 660.