GM Daewoo takes the fast lane

The slogan of GM Daewoo Auto and Technology is “New Ways, Always,” which sums up its attitude toward tackling changes after the U.S. automaker acquired its insolvent Korean rival in 2002.

Although currently ranked fourth in sales among domestic automakers, GM Daewoo has been expanding production and sales in response to growing exports, while it has been creating new jobs and investing aggressively in its research and development.

It has also established a record for treating its subcontractors well and establishing harmonious labor relations.

The result is that GM Daewoo has become one of the fastest growing automakers in the world in recent years.

The company traces its history back to National Motor, which was established in 1937 and later became Saenara Motor in 1962. Shinjin Industrial later bought the company and changed the name in 1965 to Shinjin Motor, which had a partnership with Japan’s Toyota Motor.

In 1971, the company became a partner with General Motors and changed the name to GM Korea. But Shinjin Motor later ran into financial problems and it was taken over by the state-run Korea Development Bank, which once again changed its name Saehan Motor. The Daewoo Group acquired the company and changed the name to Daewoo Motor in 1983.

GM ended its partnership with Daewoo Motor in 1992 over disagreements about Daewoo’s plans to expand aggressively in emerging markets. In addition, Daewoo Motor acquired Ssangyong Motor in 1998 after the latter encountered financial problems.

But the collapse of the Daewoo Group in 2001 set the stage for the re-entry of General Motors, which acquired Daewoo Motor that year. The rechristened GM Daewoo officially began operations in October 2002.

GM Daewoo has shown particular strength in exports, with its production of GM brand models, including Chevrolet and Buick from the U.S., Holden from Australia, and Opel from Germany.

Mike Arcamone (52) ?President and CEO ?Bachelor of Commerce degree in business administration, Concordia University ?Diploma in business management, McGill University

The company sold 580,000 units in domestic and overseas markets in 2003, but the numbers more than tripled to 1.9 million units by 2008.

Most of the growth came from exports, which accounted for 1.8 million units in 2008, up from 452,134 units in 2003. Exports included both completed vehicles and complete knock down (CKD) vehicles. This was one of the fastest growth rates for any automobile company.

Although the global automobile industry went through hard times last year, GM Daewoo is expected to export 1.6 million units this year. For GM’s total sales of 7.5 million units in 2009, GM Daewoo accounted for 21 percent despite having less than 10 percent of the Korean market.

GM Daewoo has about 17,000 employees, more than double the 8,200 workers it had in 2003.

The company claims that it has created around 40,000 when hiring by its subcontractors is included. GM Daewoo was ranked fourth in terms of job creation in Korea between 2003 and 2008, according to the Korea Chamber of Commerce and Industry.

The company’s investment, which has totaled 6.5 trillion won ($5.6 billion) up until 2009, has been mostly in expanding production facilities and new vehicle development. The company has introduced many new models each year, including the Matiz, Kalos, Lacetti, Gentra, Tosca, and Winstorm. GM Daewoo currently has five manufacturing facilities in Korea and an assembly plant in Vietnam.

As of 2009, Korean auto part makers supplied 5.9 trillion won worth of components to GM Daewoo, with an additional 1 billion won in orders coming from the parent GM group.

This represents more than double the amount of part supplies ordered by GM affiliates in 2003 and underscores the group’s support for local subcontractors.

GM Daewoo now ranks as the 30th largest conglomerate in Korea, according to the Fair Trade Commission.

Mike Arcamone became GM Daewoo’s president and chief executive last October. He is a 30-year GM veteran. After earning a bachelor’s degree in business administration from Concordia University and a diploma in business management from McGill University, both in Montreal, he joined GM in 1980. After serving as an executive in Canada and United States, he was appointed to a top post in the GM’s global purchasing and supply chain operations in 2005. He then became vice president of GM Powertrain Europe in July 2007 before joining GM Daewoo.

After coming to Korea, he has made many changes in encouraging employees to take more initiative by adopting an innovative attitude.

He reduced the executives’ office space so that other management and administrative employees would have more space.

Arcamone believes his goal is to reduce bureaucratic barriers so that workers feel free to suggest fresh ideas that would make GM Daewoo a more efficient company. He created an “Ask the CEO” Web site on the company’s intranet, where he responds to employees’ opinions and ideas.

Kim Tae-wan, who leads the company’s design center, received a bachelor’s degree from Brigham Young University and a master’s degree at the Royal College of Art. Starting his career in the United Kingdom, he was involved in designing the interior of the first class section of British Airways and went on to work in other countries, including France, Germany and the Czech Republic. Holding key design roles at Daewoo Motor and Fiat, he joined GM Daewoo in 2006 and was appointed vice president in 2008.

Ankush Arora, the newest executive addition to the company as vice president of vehicle sales, marketing and aftersales service, earned his bachelor’s degree in mechanical engineering from Thapar Institute of Engineering and Technology. His career with GM started in India in 1997, where he held sales and marketing positions before being named GM India’s vice president of sales, service and marketing. He helped establish Chevrolet as one of India’s top five vehicle brands.

Jay Cooney, vice president of Corporate Affairs, earned a master’s degree in journalism at Northwestern University and also a degree in law at the University of Arizona. Cooney was a member of Chrysler’s communications team before taking on the role as GM’s director of media relations in the Asia Pacific region and also director of global motor shows. Cooney joined GM Daewoo as vice president in 2008, bringing his extensive global experience.

Recently, GM Daewoo released its luxury upper-midsize sedan, the Alpeon, which the company hopes will improve its corporate brand image and help increase domestic sales.

Arcamone said that he will introduce seven new models to Korea within a year, showing GM Daewoo’s deep commitment to increasing its local market share, which now lags behind Hyundai, Kia and Renault Samsung.

“The recently released Alpheon has received very positive results from test drive sessions, and securing a firm place within the market in competition against other vehicles in the same segment such as the Kia K7 and Hyundai Grandeur will be crucial,” said Choi Joong-hyuk, an analyst at LIG Securities. “The Alpheon shows GM Daewoo’s urge to succeed in the Korean market as they also plan to introduce other GM brand vehicles next year.”

Choi adds that if “the company shows and proves that GM is not just using Korea as a production base but is serious about developing the local market for sales, I believe that the consumers will answer positively.”

By Jung Seung-hyun [seungjung@joongang.co.kr]