GM Korea Could Be on Its Death Bed

GM Korea

After 16 years and billions of dollars in investments, General Motors is on the verge of folding in Korea. Officials of the iconic American car brand are set to meet with South Korean heads this week in a last-ditch effort to strike a deal that salvages the local unit. With union tensions, shifting customer preferences and losses piling up, GM Corporate Officer Barry Engle has until today, April 20, to submit a turnaround proposal to the South Korean government.

"Our preferred path remains to find a successful outcome here," GM President Dan Ammann told interviewers. "It's the right thing for all the stakeholders. But everybody has got to come to the table by (April 20)."

GM Korea is seeking concessions from unions as a condition to its proposal, with the company planning to file for bankruptcy if the concessions fail to materialize.

The April 20 deadline puts some pressure on the South Korean government and the state-run Korea Development Bank, which said earlier that it needs some time to perform due diligence on GM Korea before it can approve the automaker's financial plan and release funding for it.

Even if it meets the deadline, GM Korea's troubles are still far from over because it still has to make payments to workers who agreed to leave the company as part of a voluntary severance plan. GM Korea doesn't have the cash on hand to make the payments, and GM officials told South Korean union leaders that it won't shell out any cash until a deal is made between them, the unions, and the South Korean government. Ammann confirmed GM's position during the interview.

GM CEO Mary Barra said that the brand's focus now is on profitability. She had no qualms about pulling the plug on their European, Indian and Russian ventures, and said that South Korea will receive no special treatment.

"Something can’t be a nice-to-do or a good-thing-to-do, but it really has to generate a return," Barra said to investors during a press conference. "Most of you are aware of the significant actions that we've taken to exit or restructure lower-return parts of our business over the last number years, and we're currently very involved in this in South Korea."

Late in February, GM Korea announced its plans to shut down one of its three assembly plants to stem the losses.

 

Read All

Featured Articles

Recommended Articles For You

Read All

Featured Cars

  • Upcoming

Car Articles From Zigwheels

  • News
  • Article Feature
  • Advisory Stories
  • Road Test
  • Nissan ends Q1 2025 as 3rd best-selling automaker in PH
    Nissan ends Q1 2025 as 3rd best-selling automaker in PH
    Ruben Manahan IV . Today
  • Toyota GR PH Cup leg 2 to be held in Villar City
    Toyota GR PH Cup leg 2 to be held in Villar City
    Paulo Papa . Today
  • MG vehicle buyers can win free trip to London under latest promo
    MG vehicle buyers can win free trip to London under latest promo
    Ruben Manahan IV . Today
  • Volkswagen Group to offer 20 new models in China by 2027
    Volkswagen Group to offer 20 new models in China by 2027
    Cesar Miguel . Today
  • Jaecoo J7 SHS gets 5-star rating from Euro NCAP
    Jaecoo J7 SHS gets 5-star rating from Euro NCAP
    Ruben Manahan IV . Today
  • Here’s what to expect on the road this Holy Week
    Here’s what to expect on the road this Holy Week
    Paulo Papa . Apr 16, 2025
  • Here are some iconic Manila churches you can check out for Visita Iglesia via the NLEX Connector
    Here are some iconic Manila churches you can check out for Visita Iglesia via the NLEX Connector
    Paulo Papa . Apr 16, 2025
  • Suzuki Dzire Hybrid: strengths and weaknesses
    Suzuki Dzire Hybrid: strengths and weaknesses
    Cesar Miguel . Apr 16, 2025
  • Here are some spiritual sanctuaries you can visit this Holy Week via SCTEX
    Here are some spiritual sanctuaries you can visit this Holy Week via SCTEX
    Paulo Papa . Apr 16, 2025
  • Here’s how Prestone can help make your Holy Week getaways safe, hassle-free
    Here’s how Prestone can help make your Holy Week getaways safe, hassle-free
    Paulo Papa . Apr 16, 2025
  • What should you visit first at MIAS 2025?
    What should you visit first at MIAS 2025?
    Cesar Miguel . Apr 11, 2025
  • Do you really need 4x4 for overlanding?
    Do you really need 4x4 for overlanding?
    Cesar Miguel . Mar 26, 2025
  • Number coding 2025: what you need to know
    Number coding 2025: what you need to know
    Paulo Papa . Mar 09, 2025
  • EVs still require lubrication, JAMA execs say
    EVs still require lubrication, JAMA execs say
    Paulo Papa . Mar 09, 2025
  • Ensure your vehicle is Summer road trip-ready by following these tips
    Ensure your vehicle is Summer road trip-ready by following these tips
    Paulo Papa . Mar 06, 2025
  • JAC JS4: from daily drives to ‘vacay’ vibes
    JAC JS4: from daily drives to ‘vacay’ vibes
    Paulo Papa . Today
  • First drive: Jetour X70 Lightning i-DM
    First drive: Jetour X70 Lightning i-DM
    Paulo Papa . Apr 03, 2025
  • Changan CS15: no-fuss daily driver
    Changan CS15: no-fuss daily driver
    Cesar Miguel . Mar 27, 2025
  • First drive: Mercedes-Benz EQE 350+ AMG Line
    First drive: Mercedes-Benz EQE 350+ AMG Line
    Paulo Papa . Mar 21, 2025
  • BYD Shark 6 DMO: first impressions
    BYD Shark 6 DMO: first impressions
    Cesar Miguel . Mar 19, 2025