GM Korea to close Gunsan plant… 2000 staff to be reorganized by the end of May[ Kim Yang Hyuk mj@ ] | 2018-02-14 11:09:16
By Yonhab News
Korea GM Co., on February 13, stated that it will shut down its Gunsan plant, which has an operating rate of about 20% over the past three years, by the end of May, and complete the restructuring process of about 2,000 employees (including contract workers).
Meanwhile, the company said it has made a thorough review, including a record-setting deficit of more than KRW 2.5 trillion by last year and a situation in which the capacity utilization rate continues to fall and cannot be operated. "This is the first step in our tough but necessary effort to adjust our business structure in Korea," said Khao Kajak, president of GM Korea. GM said it expects to spend up to $ 850 million (about 920 billion won), including about USD 475 million in non-cash asset write-offs and $ 375 million in labor-related cash outlays, Said.
According to sources including Reuters on February 13, GM President Dan Amman stated, "We will decide on the future of Gunsan factory (Bupyeong 1, 2, Changwon plant) in the next few weeks based on the results of consultation with the Korean government and the union." "There is a lack of time, and all of us (GM, South Korea, industrial banks, unions, etc.) have to move quickly." "Whether or not GM will remain in Korea for the long term depends on whether the Korean government is willing to provide funds or other incentives and whether the Korean union agrees to reduce labor costs.
The Korean government could not hide the embarrassment. Baek Woon-kyu, who attended a meeting of the Small and Medium-sized Venture Business Committee at the Seoul National Assembly on February 12, decided to shut down the Gunsan plant shortly after he announced that GM`s mid- to long- . The government said it would review the possibility of government support based on the results of GM`s efforts to improve its management. However, the government expressed regret in the unilateral announcement by GM.
The government, on the morning of the morning, held an emergency meeting with the Deputy Prime Minister Lee Byoung-ho of the Ministry of Commerce, Industry and Energy and the Deputy Chairman of the Sung Chu Young Industry Bank, and expressed his deep regret for GM`s unilateral Gunsan plant`s suspension and shutdown.”
The government has said it has agreed to protest GM`s unilateral announcement. A government official said, "Even if the government supports it, we will know what the cause of the management misstep is through the financial investigation of Korea GM." "Korea GM has consulted with the Korea Development Bank (KDB) for the financial inspection of the government."
After the closure of the Gunsan plant, GM`s attention is focused on further restructuring efforts. Barry Eng, vice general manager of GM, said, "We must make meaningful progress with our stakeholders by the end of February." If there is no Korean government support by the end of February, There are also interpretations that it will be done.
By Kim Yang Hyuk mj@