GM plans to withdraw its production plants from South Korea. General Motors started to gradually reduce its presence in South Korea - one of the major production bases of GM in the world, which accounts for about 20% of the annual volume of the issue of concern.
According to the \"Reuters\" agency that received information from three knowledgeable sources, the Group is constantly concerned about rising labor costs of the South Korean workers. At the point it seems more appropriate and smart to relocate production units in some other country. According to the agency, the cost of labor in the production of one car in GM Korea will increase this year to $ 1133, while the rest of the international platforms of GM have this figure at the average $ 677 point. Sources also state that the strong Korean war, along with the complication of the geopolitical situation on the Korean Peninsula, was the reason of GM coming up with a decision that it needs to maintain factories in this country no more.
That is why GM needs to reduce and \"balance\" its risks in South Korea.
Union representatives of GM Korea do not agree with this assessment and believe that GM exaggerates the information about the reduction of production in South Korea, specifically to put more pressure on workers who are demanding higher wages. In July, the same trade unions have received bonus payments in the amount of 10 million won ($ 9,000) for each employee from GM Korea. The trade union said that South Korea is still a country that is ready to produce high-quality cars at competitive prices, in contrast, for example, with Australia or Germany. But that doesn’t change anything.
Last year representatives of GM Korea confirmed the reports about the company and its decision not to produce new generation of Chevrolet Cruze in local factories, and last month GM announced the postponement of the Opel Mokka assembly from Korea to Spain. In April of this year, the head of GM, Dan Akerson, has announced the plans to protect company’s interests in the event of further complicate relations between South and North Korea.