GM Making Backup Plan for South Korean Production in Case of War
There’s a lot of Kim Jong Un-dulating as to whether or not North Korea will back up its tough words and attack either neighboring South Korea or try to send a missile to the U.S. Still, General Motors isn’t taking any chances, making a contingency plan to move production in case anything happens.
“If there were something that would happen in Korea, it’s going to affect our entire industry, not just General Motors,” said CEO Dan Akerson on CNBC’s “Squawk Box.”
Annually, GM produces 145,000 vehicles for the South Korean market and exports another 1.3 million, including versions of the Chevrolet Spark, Sonic/Aveo/Ballina, Cruze, Captiva, and Orlando that’s sold in Canada. GM’s Korean plants also produce the Buick Encore subcompact crossover.
In addition, General Motors has its small-car development operations based in South Korea, integrated as part of what used to be Daewoo.
“You’ve got to start to think about where you have the continuity of supply and safety of your assets and your employees,” continued Akerson.
Akerson said that General Motors is looking at opening a plant in Indonesia to expand its Asian production. If the need called for it, GM could shift production to the U.S., Europe, and even China, where it has a massive presence. While some might frown upon the idea of buying a Chinese-built car in the Western world, GM has sourced parts from there for production of cars in the U.S. Also, Buick, Cadillac, and other GM brands already make cars there for domestic sales around Asia.
In recent weeks, North Korea has begun testing missiles again, verbally posturing itself to attack South Korea or the U.S., one of Korea’s strongest allies. It has said that it no longer recognizes the armistice that ended the Korean War in 1953. While in the past threats like these have been pretty empty, we don’t blame GM for watching out for its interests.
Source: Detroit News
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By Jacob Brown