Shanghai being mentioned as new Asian production base for GM


Observers in the automobile industry are reviving the rumor that GM Korea will relocate its automobile manufacturing base in Incheon to a foreign country.

The rumor has resurfaced as the Korean unit of U.S. General Motors has failed to post noteworthy sales performances despite changing the company name from GM Daewoo to GM Korea and introducing the Chevrolet brand in 2011.

Following earlier speculation that GM Korea’s core production facilities will be relocated to Europe, some observers now see Chinese cities like Shanghai as candidates.

“Since late 2009 when management was seeking to drop the brand of GM Daewoo, predictions have been rampant in the market that GM could possibly pull its position out of Korea during the late stages of the Lee Myung-bak administration,” a figure close to the company said.

He alleged that the introduction of Chevrolet was a preliminary step to close down the Bupyeong factory in Incheon.

“It would be easier for the company to withdraw its investment as the nation has gone into a phase of political power transfer (several months ahead of the presidential election in December),” he said.

Unionized workers of GM Korea and the company’s subcontractors have also continued to issue a variety of allegations, calling for management to scrap any relocation project and guarantee employment security.

Though management has downplayed or dismissed the rumors repeatedly, the recent change of its Korean CEO has escalated suspicion among the union.

Last January, a British newspaper said General Motors is considering moving car production from Korea to Europe.

The plan was intended to revive the troubled Opel and Vauxhall arms, the Daily Telegraph said, adding that some Chevrolet production lines might be transferred back to Europe to bolster its production lines there.

GM Korea said in a statement that “we are not going to comment on speculation. GM Korea is an integral part of the GM organization as GM Korea’s plants are an integral part of GM’s global manufacturing footprint.”

“Our operations are flexible and are running at a healthy capacity at the moment. There is nothing to say beyond that,” it said.

In January, GM Korea announced its CEO Mike Arcamone resigned with his term not yet complete. No specific reason has yet been offered.

By Kim Yon-se (kys@heraldcorp.com)