General Motors (GM) will invest an additional $300 million (about 450 billion won) in its Korea business sites. Combined with the plan released in Dec. last year, a total of $600 million (about 900 billion won) will be invested in Korea. GM said that as its Korea business sites have returned to normal operations, including posting profits for three consecutive years, it will dispel rumors of withdrawal and strengthen competitiveness as a core production hub for small sport utility vehicles (SUVs).
GM Korea said on the 25th that it decided to invest $300 million in modernizing production facilities, including introducing new press machines, and held a celebration with the labor union at its Bupyeong plant in Incheon. Previously, in Dec. last year, GM Korea unveiled a plan to invest $300 million to improve performance, enhance product appeal, and strengthen technological competitiveness for small SUV models produced in Korea. Combined, it will invest a total of $600 million in Korea.
Hector Villarreal, GM Korea president and chief executive officer (CEO), said, "This investment is a symbolic decision that shows confidence in operating the Korea business sites," adding, "The state-of-the-art press facilities to be introduced through this investment will dramatically improve safety, quality, and efficiency on the manufacturing floor and help deliver world-class small SUVs to customers around the globe."
◇ three straight years of profit followed by large-scale investment… withdrawal rumors dispelled
The investment is also expected to quell rumors of GM Korea's withdrawal. GM closed its Gunsan plant in 2018 and, after receiving support from the Korea Development Bank, pledged to maintain its Korea business sites through 2028. With that deadline approaching, rumors of withdrawal gathered steam after GM Korea said last year it would close nine company-operated service centers nationwide and sell related properties and other asset.
However, as GM Korea's financial structure has improved successfully, GM signaled its commitment to Korea through large-scale investment. GM Korea turned to the black in 2022 with a net profit of 210 billion won, and it posted profits for three straight years with 1.5 trillion won in 2023 and 2.2 trillion won in 2024.
Models produced by GM Korea are also delivering results in global markets. A GM Korea official said, "Chevrolet's (small SUV) Trax Crossover and Trailblazer are key models in North America," adding, "The Trax Crossover has ranked No. 1 in Korea's passenger car exports for three consecutive years recently, and the Trailblazer has also established itself among the top five passenger car export models."
GM plans to use this investment to further strengthen the small SUV production competitiveness of its Korea business sites. Since its launch in 2002, GM Korea has produced about 13 million vehicles and has an annual production capacity of 500,000 units.
Park Sang-jin, Korea Development Bank chairman, said, "As the second-largest shareholder, we have worked since 2018 to restore normal operations at GM's Korea establishment, and through this $600 million investment, we will continue to consult with GM so that GM's Korea establishment can maintain competitiveness in the global market and secure medium- to long-term sustainability."