Chevy Exit From Europe Means GM Job Cuts in Korea

| + More Articles
  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

General Motor headquarter

Recent speculation about General Motors (NYSE:GM) cutting back on its South Korean presence appears to have been accurate. According to Reuters, the planned withdrawal of Chevrolet from the European market will have a direct impact on the South Korean workforce. A source inside GM Korea said the move could lead to nearly half the production workers at the Gunsan plant losing their positions, Reuters reports.

The Gunsan GM factory is located in the southwestern part of South Korea and employs 2,200 manufacturing workers. Overall, GM is expected to scale back its production in Korea by anywhere from 15 to 20 percent in 2014. After announcing it would no longer sell the Chevrolet brand in Europe beyond 2015, most observers looked to the supply chain of Korea in anticipation of job cuts expected to arrive soon. In December, GM began offering voluntary retirement to more than 6,000 non-manufacturing employees ahead of the Chevy withdrawal from Europe.

At the Gunsan factory, the focus is expected to be on the workers on the assembly lines. An inside source told Reuters about half of the 2,200 workers would lose their positions as GM planned to scale back its production by half. Union officials hoped GM would agree to simply reduce the number of cars expected every hour while keeping the same number of employees, but the obviously inefficient scheme makes that idea a long shot with company executives.

Though the proposed job cuts would have an immediate impact on worker morale in a factory producing 120,000 vehicles per year, a significant percentage of those affected may be temporary hires, of which 500 are employed at the GM Korea plant.

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business