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GM to buy back stake held by KDB
CEO Rocha reveals plan to invest over W1tr per year
By Korea HeraldPublished : Oct. 25, 2012 - 19:56
General Motors Co. plans to regain complete control of its Korean unit by buying back a 17.02 percent stake owned by the second-largest shareholder Korea Development Bank, GM Korea chief said Thursday.
GM Korea president and CEO Sergio Rocha confirmed in a press conference that he held a meeting with KDB chairman Kang Man-soo together with Tim Lee, head of international operations at GM, last Friday.
“We have agreed to progress with this discussion on a confidential basis. We have interests in enhancing Korean operation and its sustainability,” he told reporters, declining to further elaborate on the implications of the stake purchase.
Currently, the state-run KDB has no voting right with the 17 percent stake, but does hold the right to veto decisions made by the GM Korea board.
The stake talks have caused restructuring concerns as GM Korea would be able to unilaterally make crucial decisions such as reductions in local production and subsequent layoffs of employees.
In a parliamentary audit on Wednesday, the KDB chairman also said he understood such concerns. He refused to confirm Friday’s meeting, however, saying he has yet to receive any “official offer” from GM.
Celebrating its 10th year of operation last week, GM Korea has leaped into a global design and production hub of GM’s mini and small-segment cars.
Over the past 10 years, the company’s sales have seen a more than four fold growth to reach 15 trillion won ($13.6 billion) last year.
On Thursday, the GM Korea chief pledged to continue investing 1 trillion won in development and production. It has recently doubled the size of its design center ― the third largest of GM’s 10 design facilities globally.
The company also offered a design preview of the new compact sport utility vehicle Trax and the 2013 Spark city car, both of them developed by the Korean unit and to be launched early next year.
The carmaker bets big especially on the Trax, which was developed by the Korean unit for the global launch. Its European model Mokka, sold under the GM-owned Opel brand, is already gaining positive reviews, company officials said.
By Lee Ji-yoon (jylee@heraldcorp.com)
GM Korea president and CEO Sergio Rocha confirmed in a press conference that he held a meeting with KDB chairman Kang Man-soo together with Tim Lee, head of international operations at GM, last Friday.
“We have agreed to progress with this discussion on a confidential basis. We have interests in enhancing Korean operation and its sustainability,” he told reporters, declining to further elaborate on the implications of the stake purchase.
Currently, the state-run KDB has no voting right with the 17 percent stake, but does hold the right to veto decisions made by the GM Korea board.
The stake talks have caused restructuring concerns as GM Korea would be able to unilaterally make crucial decisions such as reductions in local production and subsequent layoffs of employees.
In a parliamentary audit on Wednesday, the KDB chairman also said he understood such concerns. He refused to confirm Friday’s meeting, however, saying he has yet to receive any “official offer” from GM.
Celebrating its 10th year of operation last week, GM Korea has leaped into a global design and production hub of GM’s mini and small-segment cars.
Over the past 10 years, the company’s sales have seen a more than four fold growth to reach 15 trillion won ($13.6 billion) last year.
On Thursday, the GM Korea chief pledged to continue investing 1 trillion won in development and production. It has recently doubled the size of its design center ― the third largest of GM’s 10 design facilities globally.
The company also offered a design preview of the new compact sport utility vehicle Trax and the 2013 Spark city car, both of them developed by the Korean unit and to be launched early next year.
The carmaker bets big especially on the Trax, which was developed by the Korean unit for the global launch. Its European model Mokka, sold under the GM-owned Opel brand, is already gaining positive reviews, company officials said.
By Lee Ji-yoon (jylee@heraldcorp.com)
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Articles by Korea Herald
