South Korean Government announced that it will consider meaningful allocation of new cars and South Korea’s automotive industries in regards to long-term plans for making GM Korea’s management back to being normal.
“Ministry of Trade, Industry and Energy (MOTIE) is hoping that GM Korea’s auto plant in Gunsan will operate actively once again.” said a representative for MOTIE in regards to future discussions MOTIE will have GM on GM Korea’s management. “From an aspect of industrial policies, we need to look at which models and how many supplies GM Korea’s auto plant in Gunsan will produce to revive its auto plant.”
MOTIE is clearly stating that meaningful allocation of new cars needs to take place first in regards to ‘preparation of long-term plans for normalization of GM Korea’s management’, which is one of three principles that South Korean Government presented to GM to look at ways of normalizing GM Korea’s management.
“By looking at new models and their characteristics that are presented by GM, we can deduce if these models will be produced for a long period of time.” said a same representative for MOTIE. “Conditions for support of foreign investment company according to Foreign Investment Promotion Act that is requested by GM is not easy as GM thinks and GM will be able to start receiving support from South Korean Government when allocation of new cars reaches certain level.” This representative also said that South Korean Government is waiting for GM’s plans.
South Korean Government also presented responsible roles by major shareholders and sharing of burden by all people interested such as shareholders, creditors, and unions as major principles.
MOTIE is also planning to look at South Korea’s automotive industries such as relationship between labors and managements closely during its talks with GM. “It is important to figure out how GM Korea’s labor and management are going to coexist and reduce costs in order for them to survive again.” said a representative for MOTIE. “Although South Korea has strong supply chains from automotive parts to finished products and strong R&D abilities, we are also going to look at these areas often.”
While Korea Development Bank (KDB) is going to be mostly responsible for financial talks for minimizing additional costs, MOTIE’s positions will be applied to industrial policies. It is also important to prevent crisis of GM Korea’s state from spreading to entire South Korean automotive industries.
“No single department will be in charge of normalizing GM Korea’s management. Many government departments such as Ministry of Strategy and Finance, MOTIE, and KDB are all responsible for finding appropriate solutions for GM Korea’s management” said a representative for MOTIE regarding confusion on control tower and departments responsible for GM Korea’s management. “However, MOTIE will be the one that will be responsible for outside communications.”
GM promised that it will submit its plan to normalize GM Korea’s management through an official channel as soon as possible after having series of talks with relevant departments last week. It is expected that finance due diligence between GM and KDB for finding out status of GM Korea’s management will take place before GM submits its plan.
Staff Reporter Yang, Jongseok | jsyang@etnews.com