GM will transfer operations out of South Korea due to North Korea tensions

Article by Christian A., on April 12, 2013

Because of the increasing tension with the North Korea, it’s possible that General Motors Co. will transfer operations out of South Korea in the longer term. This plan upset its Korean union, which charges the company of exploiting this instability as leverage for the annual labor negotiations. In the past few weeks, North Korea has been threatening South Korea and the U.S. that it is prepared to go into war against them.

North Korea had recently closed an industrial park that it operated with South Korea a few kilometers within its border. Last week, GM CEO Dan Akerson felt the need to make contingency plans for its employees at its four car manufacturing plants and one transmission factory in South Korea.

Akerson said that it will be hard to transfer production from South Korea but that the worsening situation on the Korean peninsula has forced it to consider shifting production long-term. At the same time, GM is about to enter talks with the Korean labor union about its annual wages and a broader potential restructuring of its production system. In fact, the union had its first strike in four years last year over a new shift system.

Union spokesman Choi Jong-hak told Reuters that Akerson’s statement to not make excessive demands is a “threat” as he sees the labor union to be a “stumbling block for its restructuring of its global production system."

Executives said that South Korea is one of the largest overseas manufacturing bases for GM, offering more than four out of 10 Chevrolet vehicles sold worldwide. However, it has been losing its competitive edge because of a troubled relationship with the trade union and a won currency that’s on the rise.

Topics: gm, south korea

If you liked the article, share on:

Comments

Recommended

Are you a big fan of legendary boxer Mike Tyson, the former heavyweight world champion? Or are you a big fan of the iconic Ferrari F50? Either way, you will...
by - February 24, 2017
It seems that AM-RB 001 hypercar is not the only vehicle project that Aston Martin and Red Bull Racing has gone into. This time, don’t expect something as outlandish as...
by - February 24, 2017
The year 2018 marks the golden anniversary of Subaru of America. Of course, the company will celebrate 50 years of being at the helm of the brand’s crusade in North...
by - February 24, 2017
During car crashes and accidents, there are times that its occupants can’t get out easily. There are times when the only way to get out of that situation is to...
by - February 23, 2017
Could this be a special version of Ferrari’s much acclaimed LaFerrari? No matter how we look at it, the patent images for this sports car from Ferrari indicate its striking...
by - February 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries