GM May Shutter its South Korean Operations

They may be hosting the Olympics, but that doesn’t mean they buy enough GM products. According to a report from Bloomberg, GM has put its South Korean department on notice.

Part of its new international strategy, the carmaker has been simply pulling out of markets where a path to profit seems possible and it seems that a path is becoming harder and harder to find in Korea.

Mary Barra, CEO, has put South Korean stakeholders on notice that costs are too high and that something has to change.

“We’re going to have to take actions going forward to have a viable business,” said Barra of GM’s Korea operations, according to Bloomberg.

GM bought Daewoo in 2002, but has had a hard time competing against Kia and Hyundai. Adding to its troubles, sales dropped 20% in South Korea last year and manufacturing costs have gone up.

Similar moves were made in with the sale of Opel and Vauxhall to PSA, and GM’s shrinking operations in Russia and India, four out of every five GMs sold are sold in either America or China.

Despite the bad omens, it’s too soon to say exactly what will happen in the market.

GM, though, will take actions that “may result in some rationalization actions or restructuring that potentially could have a material impact on our results,” said Barra. “It’s too soon to tell right now.”

[source: Bloomberg]

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