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New GM Korea CEO faces labor disputes, falling sales

Roberto Rampel, president and CEO of GM Korea, visits the company’s Bupyeong plant. (GM Korea)
Roberto Rampel, president and CEO of GM Korea, visits the company’s Bupyeong plant. (GM Korea)
GM Korea’s new chief executive Roberto Rempel has made his first on-site inspection to the carmaker‘s No. 1 Bupyeong plant early this month, officials said Monday, making a leadership change official within the US company’s operation in South Korea.

The new CEO, however, faces a series of challenges ahead. The carmaker has been making a last-ditch effort to restore its market share amid rumors circulating that it is already in the process of leaving the country. The urgent task for Rempel appears to be resolving the carmaker’s prolonged disputes with a hardline labor union. The disputes have caused a setback in its efforts to rebuild its market reputation and customer base for years, according to market insiders.

The labor union has raised concerns over the management‘s decision to shut down a plant and reshuffle employees, saying that this had been ”unilaterally“ decided.

As GM Korea plans to shut down the No. 2 Bupyeong plant, the carmaker has switched to a one-shift system, or regular daytime shifts, from the two-shift system at the plant. It will also relocate 1,200 workers from the No. 2 Bupyeong plant to the No.1 Bupyeong and Changwon plants by the end of this year.

The labor union has also requested for a wage and incentive increase, a difficult request to fulfil considering the carmaker‘s piling debts and plummeting sales.

GM Korea’s sales last year dropped by 35.7 percent on-year, having sold only 237,044 units.

The numbers are worse this year, as sales for the period between January to April dropped by near 50 percent on-year with only 10,350 units sold.

GM Korea is trying to seek a fresh start by introducing new models such as the Chevrolet Next Equinox and a next-generation crossover utility vehicle in 2023.

The South Korean unit of General Motors had invested 200 billion won ($159.74 million) on establishing manufacturing infrastructure in the No. 1 Bupyeong plant to produce 500,000 cars a year here. It is currently test-manufacturing five CUVs a week to aim for an annual production target of at least 250,000 CUV units at its Changwon plant.

Experts say that the carmaker should show its assurance in continuing its business in South Korea by deciding whether to manufacture electric vehicles here or not.

GM Korea is the only domestic carmaker that does not manufacture EVs in the country, and has to fully rely on imports.

The carmaker announced last year that it will launch 10 EVs in South Korea by 2025.

Rempel has previously said the company is considering an EV project here for securing future competitiveness in the domestic market, without elaborating on the plan.

By Hong Yoo (yoohong@heraldcorp.com)
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