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GM Korea to invest $2.8bn in two new global vehicle programs

ABR Staff Writer Published 14 May 2018

GM Korea is planning to invest $2.8bn in high-demand, high-margin SUVs and CUVs, creating several jobs directly and indirectly in Korea.

The company announced a business plan, which is expected to allow it to return to profitability by 2019.

GM and the Korea Development Bank (KDB) have agreed on a balance sheet restructuring that will enable GM Korea to reduce its existing debt by about $2.8bn.

GM executive vice president and GM International president Barry Engle said: “GM is very excited about our future in Korea.

“Together with the KDB, the Korean Government, the labor union and our supplier partners, we have created all of the building blocks for executing a long-term viability plan that will be good for our people, good for our company and good for Korea.”

As per the new plan, from now on, the company will design, engineer and manufacture an all new small SUV for the Korean market, which will also be exported. It will manufacture an all new CUV-type vehicle for the Korean market and export markets.

It will also engineer and manufacture a small three-cylinder gasoline engine in the country for the next generation global vehicles.

The investment is expected to sustain about 200,000 direct and indirect jobs in the country, including at local suppliers.

GM Korea president and CEO Kaher Kazem said: “GM Korea now has the right fundamentals to grow a successful business in Korea for the long term.

“Our Chevrolet customers, employees, partners and community will all be part of this bright future. We will convey Chevrolet’s true value to domestic consumers again through the launch of new models and innovative customer care programs, in addition to large-scale customer-focused marketing and sales activities.”

Recently, company was on the verge of bankruptcy. In February GM planned to close one of its local plants. The company posted $1.1bn in net losses, for fourth year in a row.

It has sought government assistance through funding, incentives and wage concessions. The Korean government have agreed on a rescue package worth $7.5bn.

Image: GM executive vice president Barry Engle. Photo: Courtesy of General Motors Co.