UPDATE : 2019.7.15 MON 18:50
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Subcontractors campaign to boost GM car sales in S. Korea

Subcontractors of GM Korea Co. and business associations in cities where the carmaker has plants have teamed up to help boost the carmaker's vehicle sales amid speculation that its parent, General Motors Co., may withdraw from South Korea due to poor performance and high costs, the industry watchers said Wednesday.

Subcontractors, business associations in Incheon and Gunsan and local citizens have launched a campaign to promote sales of GM Korea's vehicles, as the carmaker's exit could lead to serious fallout for the two cities, people familiar with the matter said.

GM Korea manufactures the Malibu midsize sedan and the compact Trax SUV at its Bupyeong plant in Incheon, just west of Seoul, and it produces the Cruze compact and the seven-seat Orlando SUV in Gunsan, 274 kilometers south of the capital city.

GM Korea, which is 70.12 percent owned by the Detroit-based carmaker, marked its 15th year of doing business in Asia's fourth-biggest economy Oct. 16 amid growing concerns that it may opt to leave the country entirely.

Concerns about GM's possible exit were fueled further when GM Korea President and Chief Executive Kaher Kazem didn't deny speculation on the matter in a parliamentary audit session Monday. Without denying the rumors of an exit, the executive said that, from management to employees, everyone is doing their best to put the carmaker back on track.

In this photo, taken July 6, 2017, a GM Korea worker passes by the west gate of the carmaker's plant in Bupyeong, just west of Seoul. (Yonhap)

In the January-September period, GM Korea's domestic car sales plunged 20 percent to 102,504 units and exports also dropped 2.3 percent on-year to 299,476.

This year, GM Korea is widely expected to post an operating loss of up to 900 billion won (US$798 million) after recording a combined 2 trillion won operating loss in the previous three years.

On top of poor sales, GM Korea faces a major stumbling block, as wage talks with the union are still pending. The company and its union have yet to finalize this year's wage negotiations, which have been suspended until new union leadership is elected in mid-November.

GM is widely expected to restructure its operations here to reduce net losses and seek a turnaround. Possible restructuring measures include the sale of some of its domestic plants and job cuts.

In South Korea, GM has four plants, a design center, a technical center and a proving ground for new vehicles. Its product lineup lacks competitive SUVs at a time when global demand for crossovers is on the rise. All GM cars sold in South Korea use the Chevrolet marque.

Hwi Won  edt@koreapost.com

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