As GM Korea's export competitiveness diminishes due to tariffs from the United States, rumors about GM Korea's withdrawal continue to circulate. Employees at GM Korea's Chevrolet direct service centers are appealing to customers to stop the sale of GM Korea's assets. As the year 2028 approaches, when the headquarters in the U.S. promised to maintain its status as the largest shareholder, discussions regarding the survival of GM Korea are expected to intensify.
Employees at GM Korea's Chevrolet direct service centers recently stated in an appeal letter to customers, "If the direct maintenance center, which is affiliated with the headquarters, is sold, there will be disruptions in existing services such as responding to customer complaints and recalls. We hope you will help prevent this situation together." GM Korea noted it would push for the sale of nine nationwide direct service centers, as well as idle assets and land at the Bupyeong plant, back in May.
Rumors of withdrawal continue as GM Korea shows signs of downsizing. GM Korea's domestic sales from January to July this year were 9,347 units, down 40.3% compared to the same period last year. GM Korea exported 88.5% of last year's production to the United States, but overseas sales from January to July this year fell to 281,579 units, a decrease of 3.6% from the same period a year ago. As the U.S. confirmed a 15% tariff rate on automobiles, there is a high possibility of further declines.
GM's decision to jointly develop five vehicle models with Hyundai Motor in the U.S. automobile market is also increasing anxiety among GM Korea employees. GM and Hyundai Motor plan to develop four models, including a midsize pickup truck for the Latin American market, a small pickup, a small passenger vehicle, and a small SUV, along with one electric commercial van for the North American market, intending to produce more than 800,000 units annually starting in 2028.
Currently, the small car segment is dedicated to GM Korea. The small car that GM is set to develop with Hyundai Motor is intended for the Latin American market, but there is also a possibility of it expanding to the North American market. GM has not allocated new models to GM Korea for several years.
In addition, conflicts with labor unions and the 'yellow envelope law', which effectively bans corporations from claiming damages for illegal strikes by unions, are also factors lowering GM Korea's potential for survival.
In 2018, GM Korea closed the Gunsan plant and undertook large-scale restructuring due to management difficulties. At that time, the Korea Development Bank injected 810 billion won in public funds on the condition that GM maintains its status as the largest shareholder of GM Korea until 2028. An industry source noted, "As the 10-year bailout agreement expires in 2028, discussions about GM Korea's withdrawal will intensify."
There is also a view that it will be difficult for GM to close its Korean plants immediately. GM is increasing investment in the U.S. to reduce the proportion of overseas production, but high labor costs present limitations.
Mary Barra, CEO of GM, assessed on the 22nd of last month, "The Korean plants have been operated efficiently and have produced high-quality vehicles. The vehicles made there continue to be in demand and positively contribute to our (GM) profits."