GM Threatens to Halt Investment as Korean Workers Strike

  • By Ryu Jung

    November 09, 2020 13:08

    GM Korea on Thursday warned that it will review pledged investment in the automaker's plant in Bupyeong west of Seoul after workers went on strike regardless of their perilous situation.

    Assembly line workers went on a half-day strike on Oct. 30, Nov. 2 and 6 and threatened more partial strikes this week.

    The threat could be intended to get workers to return to the production lines, but there are fears that GM is trying to get out of its commitments to the government and quit Korea altogether.

    GM had promised to invest US$190 million into the Bupyeong plant starting next year to co-manufacture new utility vehicles assigned for production at its Changwon plant in 2022. At present, the Bupyeong plant makes only the small Trailblazer SUV.

    "We experienced a serious liquidity crisis in the first half of this year because of the coronavirus crisis, which resulted in a production decline of more than 60,000 cars. The recent partial strikes cost us at least another 7,000 cars," GM Korea said. "Cumulative production losses are expected to reach 12,000 cars if the strikes continue, which would make the situation even worse."

    One industry watcher said, "It looks like further investment has become realistically impossible due to cashflow problems." an industry insider quoted GM Korea CEO Kaher Kazem as saying in September, "If another production glitch occurs, GM will have to pull out of Korea."

    Observers fear GM will gradually decrease investment in Korea despite earlier pledges and eventually pack up and leave.

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