General Motors to close its vehicle manufacturing plant in South Korea

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The company's CEO Mary Barra has said GM urgently needs better cost performance from its operations in South Korea, where auto sales have slowed. Cumulative losses over the last four years stand at W3 trillion (US$1=W1,086).

The White House did not immediately provide clarification on whether Trump had been told by GM that vehicle production would be moved from South Korea to Detroit. It has shut down its manufacturing operations in Australia, abandoned its retail network in India, walked out of the Russian and South African markets, and sold off its European Opel/Vauxhall subsidiary to France's PSA.

GM's plan places South Korean President Moon Jae-in in an uncomfortable spot.

The U.S. automaker said it would decide the future of its remaining South Korean operations within weeks, and is in talks with the South Korean government and labour unions on how to cut costs and make the business profitable.

Investments in new models for the South Korean plants to build depend on new cost-cutting agreements, Ammann said.

GM slipped 0.2 percent to $41.93 as of 9:35 a.m. Tuesday in NY.

GM Korea has made significant contributions to the Korean economy and the automotive industry by producing cars that were mainly exported to dozens of countries. Most of the financial writedowns would be recorded by the end of the second quarter.

For its part, the Seoul government said it would order the state-owned Korea Development Bank, which holds a 17% stake in GM Korea to conduct a thorough analysis of its management over the past years.

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The firm's key officials state that the shutdown of the unit is a part of its business restructuring plan in Asia. However, the rise in the labor costs, low demand for sedans, and high investments across automobile sector in China have hindered GM's growth prospects in the country, apparently.

"This represents more of what we've come to expect from today's GM".

In 2016, GM's operations across Asian countries had suffered huge setbacks except in China.

The automaker's decisions to exit other unprofitable markets have exacerbated problems for GM Korea, which used to build numerous Chevrolet models GM once offered in Europe.

GM saw the acquisition as an opportunity to produce both for the booming Korean domestic market while also exporting vehicles to the USA and other markets with high labor costs.

The factory to be closed in the western port city of Gunsan has been increasingly underutilized, operating at roughly 20 percent of capacity over the past three years, according to a statement Monday by GM Korea Co.

The U.S. company planned to restructure some 2,000 employees, including irregular workers, without elaborating on it.

"GM is not waiting for another global downturn to make these decisions", Sullivan said. GM owns 77 percent of the operations while GM's main Chinese partner, SAIC Motor Corp., controls 6 percent.