GM's decision to close plant in S. Korea causes chain reaction
- 6 years ago
Exactly a week ago,... General Motors announced its plan to shut down an assembly plant in South Korea as part of its global restructuring program,... a decision that's forecast to affect thousands of Korean workers.
The auto giant's international president Barry Engle is in Seoul for meetings with government officials -- possibly looking for financial support in return for keeping the plant's lights on.
Lee Jeong-yeon has the details.
Last Tuesday, GM Korea announced that it would close down its assembly plant in Gunsan, Jeollabuk-do Province, one of its four assembly plants in the country,... before the end of May.
The move is causing a massive knock-on effect on local firms as car manufacture involves a large chain of suppliers.
Around 2-thousand are at the risk of losing their jobs at the plant,... but subcontractors are also on the brink of bankruptcy,... with their operations falling by 20 percent last year. Around 17-thousand employees at 136 of GM Korea's first and second-tier subcontractors could be affected.
One subcontractor said 8 out of 11 workers at the firm had already quit, as continued losses over GM's virtually non-existent production at Gunsan in the past year,... meant the subcontractor was unable to pay its employees.
The motor company cited poor performance as the reason for the shutdown,... blaming a fall in demand for its vehicles as well as high labor costs.
GM Korea saw around 2 trillion won, or 1-point-8 billion US dollars in net losses for the three years up to the end of 2016, and last year the estimated net loss was around 600 billion won.
Including family members of the laborers at GM, around 50-thousand people are impacted by this shutdown, that's about one sixth of the total Gunsan population.
The ruling Democratic Party responded to GM Korea's decision by saying it cannot accept the decision, as General Motors has "social duties to fulfill as a global corporation."
Lee Jeong-yeon, Arirang News.
The auto giant's international president Barry Engle is in Seoul for meetings with government officials -- possibly looking for financial support in return for keeping the plant's lights on.
Lee Jeong-yeon has the details.
Last Tuesday, GM Korea announced that it would close down its assembly plant in Gunsan, Jeollabuk-do Province, one of its four assembly plants in the country,... before the end of May.
The move is causing a massive knock-on effect on local firms as car manufacture involves a large chain of suppliers.
Around 2-thousand are at the risk of losing their jobs at the plant,... but subcontractors are also on the brink of bankruptcy,... with their operations falling by 20 percent last year. Around 17-thousand employees at 136 of GM Korea's first and second-tier subcontractors could be affected.
One subcontractor said 8 out of 11 workers at the firm had already quit, as continued losses over GM's virtually non-existent production at Gunsan in the past year,... meant the subcontractor was unable to pay its employees.
The motor company cited poor performance as the reason for the shutdown,... blaming a fall in demand for its vehicles as well as high labor costs.
GM Korea saw around 2 trillion won, or 1-point-8 billion US dollars in net losses for the three years up to the end of 2016, and last year the estimated net loss was around 600 billion won.
Including family members of the laborers at GM, around 50-thousand people are impacted by this shutdown, that's about one sixth of the total Gunsan population.
The ruling Democratic Party responded to GM Korea's decision by saying it cannot accept the decision, as General Motors has "social duties to fulfill as a global corporation."
Lee Jeong-yeon, Arirang News.