GM Korea’s Changwon Plant Firing on All Cylinders

General Motors Korea restarts production of its Damas and Labo light-delivery vehicles ahead of schedule, literally and figuratively breathing new life into the automaker’s Changwon assembly plant.

The General Motors subsidiary has spent about 20 billion won ($19.6 million) on new plant facilities and equipment for the relaunch of the two vehicles, after lobbying by members of the Korean business community persuaded the automaker to resume the Damas and Labo lines.

GM Korea drew the ire of the commercial sector when it announced in June 2013 it was ending Damas and Labo production because upgrading them to comply with new government safety and emissions standards would be too expensive – 200 billion won ($183 million).

The Korean government agreed to waive its tougher, revised occupant-safety and carbon-dioxide emissions rules for the two models up to six years.

The company says it is updating diagnostics equipment on the two revived models to better track emissions and soon will add a tire-pressure monitoring system.

Improvements at the Changwon complex, which also builds the Chevrolet Spark minicar, Spark electric vehicle, and 0.8L, 1.0L and 1.2L engines and transmissions, include a new 47,361-sq.-ft. (4,400-sq.-m) body shop with enhanced robotic line technology, along with other production floor enhancements.

The automaker says it can produce 14,000 Damas minivans and Labo mini-trucks, with maximum output at about 18,000 units, while the plant’s total annual capacity is estimated at 230,000 vehicles and 580,000 engines.

The minivan and pickup have proved perennial favorites of small businesses because they are able to zip through small alleys or crowded parking areas. Equipped with 0.8L engines and 5-speed manual transmissions, the vehicles also are inexpensive to purchase and economical to operate.

GM Korea says a new Damas costs about 9.6 million won (about $8,804), while a new Labo typically sells for between 8.07 million and 8.84 million won ($7,401 to $8,107).

The return of the two small LCVs to the assembly floor gives Changwon employees a boost of enthusiasm because it demonstrates GM Korea’s responsiveness to the needs of its workforce as well as the surrounding community, says In-Hyung Lee, supervisor-Damas and Labo assembly operations.

“It’s not just me,” Lee tells WardsAuto through an interpreter during a walking tour of the 7.9 million-sq.-ft. (731,400-sq.m) campus. “It's all of us...we are very proud” that GM Korea again is producing “small vehicles for small-business owners.”

In addition, he says, the plant investment makes assembly of the two models easier logistically and provides more comfortable, environmentally friendly meeting and break areas. “This is a new building and (GM Korea management) cared for our welfare. It’s much better.”

Lee says his crews particularly appreciate that in resuming Damas and Labo production, the automaker has restored 200 jobs that had been lost during the eight months the lines were shut down.

Most of the employees who were assigned jobs elsewhere have asked to return to their posts at Changwon, the only operation in South Korea that turns out the two vehicles.

Those same employees have shown a renewed eagerness to help meet GM Korea’s latest production goals because, along with the new and upgraded shop, the automaker has added a second Damas and Labo work shift, Lee says.

For the consideration GM Korea’s management has shown them, the employees he oversees “are willing to work more and do more,” he says. “We can say that ‘We produce Damas and Labo for you.’”

Located about 250 miles (403 km) southeast of Seoul and a little more than 24 miles (39 km) inland from the port city of Busan, the Changwon facility was opened by Daewoo in 1991, a decade before that automaker was bought by GM.

The plant in October 2013 launched a solar-power installation with an estimated 9,700 photovoltaic cells that generate about 3,700 Mw of electricity annually. When fully installed and running at capacity, the solar array is expected to be the largest of its kind among all GM plants, able to generate enough solar energy to cut carbon emissions by 2,180 tons annually.

Sergio Rocha, GM Korea president and CEO, tells WardsAuto that beyond its role as main producer of the company’s mini segment, Changwon is expected to be the launch site for new product architecture, including next-generation vehicles and powertrains.

“It gives a solid indication that Changwon has played, is playing and will continue to play a key role for General Motors Korea and General Motors globally on the mini segment,” Rocha says. “There are only two major sites today where this product gets produced, and we are the leading plant and we have the intention to continue to be.”