Amid persistent rumors of leaving South Korea, GM Korea’s new chief said Thursday he would focus on reviving the financial stability of the carmaker first by cutting down its costs and promoting sales next year.
In his first meeting with Korea media, Kaher Kazem, president and CEO of GM Korea, said the carmaker will launch Equinox, a Chevrolet compact sports utility vehicle, next year to expand the carmaker‘s sales volume.
Kaher Kazem, CEO and president of GM Korea, speaks at a press conference in Seoul on Thursday. (GM Korea)
"In terms of what I am focused, what our leadership is focused on, what the whole organization is focused on is really turning around the operation,” Kazem said.
"The financial viability is extremely important in terms of building sustainable future and getting everyone on that and focused on that and dispelling all those rumors is important. And from that perspective I can show you what I am working on,” he said.
The former CEO of GM India was speaking amid monthslong rumors of the carmaker pulling out from the country after suffering piling losses. GM Korea lost 531 billion won ($488.1 million) in operating deficit last year alone, with its entire loss expected to exceed 2.5 trillion won this year. Kazem started working here as of Sept. 1, replacing the former chief James Kim who voluntarily stepped down from the post, citing personal reasons.
The sudden departure of the ex-CEO stirred media speculations the US carmaker would be seeking to put its Korea operation up for sale.
GM Korea’s contribution to the Korean economy is “significant” as well as its strength in design, engineering and production capability, the CEO said. But the carmaker losing money for three years in a row is “not acceptable.”
To expand sales volume, the carmaker will engage in aggressive marketing efforts including launching a nationwide driving experience campaign and securing more of the Bolt EV next year.
But to achieve a turnaround, the CEO also said it could take some time for the company to do so, citing the complex situations.
When asked whether the company plans to sell off its production facility in Gunsan, North Jeolla Province, which reduced its capability to 20-30 percent, the CEO said he is looking at “various options,” instead of giving a direct answer.
On labor disputes, the CEO said he was to attend a wage negotiation with the union later in the afternoon. The talk between management and labor has remained stalled for months. The labor group has been reportedly demanded management expand the production of more Chevrolet lineups, including the Equinox. Whether domestically produced or imported, it is important to give wider choice for customers trusting the value of Chevrolet, he added.
In 2002, GM acquired Daewoo Motor, formerly an auto unit of the now-defunct Daewoo Group, on the condition of maintaining its management right for 15 years. The provisions of the agreement were made between GM and the state-owned Korea Development Bank, which holds 17.02 percent of shares in GM Korea. The provisions expired last month, with no regulatory hurdles remaining to prevent a possible GM exit from Korea.