Published : Dec. 21, 2018 - 17:25
GM Korea, the South Korean unit of General Motors Co., said Friday that it plans to launch a separate R&D company early next year after completing the necessary procedures.
Early this week, GM Korea held a shareholders meeting to approve the plan as the Korea Development Bank, the second-biggest shareholder in GM Korea, backed the carmaker's plan to spin off a research unit in a reversal of the state lender's opposition to the plan.
(Yonhap)
In a regulatory filing, GM Korea said the research unit, dubbed GM Technical Center Korea, Ltd., will be established on Jan. 2, and around 3,000 employees will work in the spun-off company.
The new stand-alone R&D center will lead the global engineering for two vehicle programs allocated to GM Korea's manufacturing operations in May -- an all-new subcompact sport utility vehicle and all-new cross utility vehicle-type model -- as part of the company's viability plan, GM Korea said earlier.
GM Korea's union held a partial strike on Wednesday in opposition to the shareholders' approval.
GM Korea workers have strongly opposed the plan as they see it as a step by the Detroit carmaker to scale down its production facilities here in the long term.
Last week, the KDB said it will complete its injection of $750 million into GM Korea later this month as part of the rescue package signed in May. In the same month, GM shut down one of its four car assembly plants in Korea due to a low utilization rate.
Under the package, the KDB pledged to inject $750 million, while GM agreed to provide $3.6 billion in fresh loans to keep GM Korea afloat.
In the 2014-2017 period, GM Korea posted 3.13 trillion won in accumulated net losses due to a lack of new models and weak sales.
In June, the KDB injected $375 million into GM Korea, but the bank had said the remaining half may not be provided amid speculation that GM may keep only its research facility in Korea and eventually shut down its manufacturing facilities here.
The May agreement prohibits GM from selling any stake in GM Korea over the next five years and limits GM's right to sell shares or assets in GM Korea for 10 years. (Yonhap)