General Motors Co. wants to get a nearly complete control of its South Korean unit by purchasing a 17% stake held by the unit's second-largest shareholder. This move restored concerns that it could pave the way for restructuring steps. GM already owns nearly 77% of GM Korea but Korea Development Bank's 17% holding means that the state-run bank has the right to veto the automaker’s decisions.
South Korea represents a small market for GM but it’s one of GM’s major production bases. From this point, GM exports Chevrolet cars to Europe and other countries. In fact, it accounts for about 25% of the global production of Chevrolet. According to Tim Lee, GM's head of international operations, an "informal offer" was made to the bank's CEO Kang Man-soo in Friday’s meeting.
He said that the bank will think about a sale as soon as it gets an official proposal. GM Korea was formed when GM acquired a majority stake in the unsuccessful Daewoo Motor in 2002. GM is the No. 3 carmaker in South Korea after Hyundai Motor and Kia Motors. China's SAIC Motor Corp. owns the 6% stake left in GM Korea.
Local media have reported that an agreement may give GM some leeway if it implements restructuring at its plants in South Korea. In a Reuters report last January, GM may transfer some Chevrolet production from South Korea to Opel in Europe as part of its attempt to save the European unit. However, an executive denied such plans last May.