After Europe decision, GM cuts Korea workforce

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After Europe decision, GM cuts Korea workforce

General Motors plans to slash its head count in Korea next year as it prepares to withdraw its Chevy brand in Europe, a major export market for Korean-made cars.

GM Korea CEO Sergio Rocha has said the company plans to launch a voluntary retirement scheme open to its 6,000 salaried workers by March in what would be its fourth round of job cuts since 2009, a spokesman said yesterday. But Rocha said the automaker does not plan to shed production jobs.

The 6,000 salaried workers who are eligible to apply for the voluntary retirement program include research and design staff, which amounts to about 2,200 positions.

“This is part of our ongoing efforts to enhance operating efficiency,” spokesman Park Hae-ho said without disclosing a target for the job reductions.

GM said early this month that it will drop the Chevrolet brand in Europe by the end of 2015, opting to focus on its Opel and Vauxhall lines to try to return to profitability there. The move is expected to lead GM’s South Korean production to fall by as much as 20 percent by 2015. Korea supplies most of the Chevys sold in Europe.

“Workloads are too light and there is a lot of anxiety about job restructuring,” an employee at GM Korea’s research and development center told Reuters.

He said the center plans to complete the development of the next-generation Spark mini-car in March next year, ahead of a 2015 rollout, and after March there would be no projects in the pipeline.

“For me, this is the biggest crisis facing GM Korea since 2000 [when Daewoo Motor went bankrupt],” he said on condition of anonymity, because he is not authorized to speak to the media.

The then-defunct Daewoo Motor was acquired by GM in 2002. Reuters
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