Korea GM: "Asset Efficiency Measures... No Plans to Withdraw"
Korea GM, which had faced speculation about withdrawing from the country due to the impact of U.S. tariffs, has begun selling off some of its directly operated service centers nationwide as well as certain facilities at its Bupyeong plant in Incheon.
Yonhap News
On May 28, Korea GM announced, "We plan to begin discussions with relevant stakeholders regarding measures to secure financial sustainability amid rapidly changing industrial and global business environments," adding that the company had notified all employees of the decision to proceed with these sales on the same day.
Korea GM stated that it will first sequentially sell nine directly operated GM service centers across the country. Customer support services will continue to be provided through 386 partner maintenance centers, and the company also pledged to guarantee the employment of staff currently working at the directly operated service centers even after the sale.
Korea GM also said it would hold discussions with various stakeholders regarding the sale of idle assets, underutilized facilities, and land at the Bupyeong plant. The company added that, for asset sales and related matters, it would obtain asset value assessments from credible institutions.
The sale of directly operated service centers is seen as a response to Korea GM's sluggish domestic sales. With this decision, longstanding speculation about the company's potential withdrawal from the Korean market is expected to resurface. GM has a history of quickly deciding to withdraw from overseas production bases when cost variables arise, and in Korea, it previously shut down the Gunsan plant in 2019 due to declining profitability.
Recently, since the launch of the Donald Trump administration, concerns have emerged within the industry that if Korea GM, which exports 85% of its output to the U.S., loses price competitiveness in the U.S. market due to tariffs, GM may decide to withdraw from its Korean operations.
However, Korea GM has sought to dispel such speculation by allocating an additional 21,000 units of new car production to the Bupyeong plant last month, and assigning another 10,000 units this month. A Korea GM official stressed that the decision to sell assets is "a measure to secure business efficiency and does not mean that Korea GM is planning to withdraw from the country."
Hector Villarreal, President of GM Asia-Pacific and Korea Operations, stated, "Maximizing the value of idle assets and rationalizing the operation of loss-making service centers are important for maintaining the company's sustainability," adding, "Our current vehicle production programs still have several years remaining, and this measure is crucial for securing the company's business efficiency."
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