GM Says It’s Not Pulling Out of South Korea

GM Korea’s new CEO Kaher Kazem says GM has no intention of giving up on its South Korea operations.

Kazem held a press conference on his sixth day on the job as CEO to dispel reports in the Korean news media alleging GM is planning to sell off GM Korea and pull out of the country.

Kazem said the reports are untrue and stressed he is committed to turning GM Korea around, making the company competitive in all markets, erasing its financial deficit and improving its profitability.

He identified South Korea as Chevrolet’s fifth-largest and fastest-growing market, and pointed out the company’s role as one of the most vital design, engineering and manufacturing bases in GM’s global operations.

The conference was held at GM Korea’s design center, where Kazem and chief designer Stuart Norris were able to show reporters how vital GM Korea is to the GM global organization.

Kazem and Norris explained the design center is working on several advanced vehicles for the global GM portfolio, as well as for the local Korean market.

They reviewed how GM Korea is the global center for small cars for the parent company, and has designed many highly successful Chevrolet models that have sold well in world markets, including the U.S. and Europe.

This expertise won it the Chevy Cruze project, in competition with all other GM engineering and design centers in the world. GM Korea designed and engineered the Cruze at Bupyeong from the ground up and put it through its shakedown tests at its own test track and vehicle-testing facilities in Incheon, Kazem said.

The Cruze quickly became one of the most successful vehicles ever launched by Chevrolet, and one of the best, with high marks for durability and reliability, he said.

Norris pointed out GM Korea also has designed, engineered and developed the Chevrolet Bolt EV, on which he was lead designer, and the Spark and Spark EV, which is a best-selling subcompact in South Korea and many other markets.

Other models designed and developed at GM Korea’s Bupyeong product development center include the Aveo, Captiva, Trax, Orlando and others.

GM Korea also feeds a high number of completely knocked down kits for the Captiva for reassembly by GM Shanghai in China, along with components for other vehicles.

Kazem met with reporters at the Bupyeong headquarters one day after workers belonging to the GM Korea Branch of the Korean Metal Workers Union held their first partial strike. The union and management are deadlocked in wage negotiations that have been going on since July 24.

Kazem met with the union as a first order of business when he joined GM Korea Sept. 1. He reportedly told employees and the workers’ union leadership that a turnaround in the company’s financials is absolutely vital.

GM Korea has an accumulated deficit of some 1.97 trillion won ($1.8 billion), racked up over the past three years.

In recent months Korean news media have been reporting intensified rumors citing “insiders” who allege GM inevitably will pull out of South Korea because of poor overseas sales and the ongoing financial losses.

Even when GM International brought in the savvy and skilled 20-year veteran Kazem to head the company, many media outlets reported his presence was another sign that GM’s departure from Korea was imminent. GM Korea quickly denied it.

The Korean press identified Kazem as a “restructuring specialist” who engineered the downsizing of GM’s operations in India by selling off its main plant to BAIC of China, and converting the remaining plant to an export-only facility.

Kazem’s colleagues say that, to the contrary, he is skilled in optimizing operations and building up their efficiency and competitiveness.

An Australia-educated electrical engineer who also holds an MBA, Kazem joined GM Holden as a senior engineer and then held other important leadership positions.

He was promoted to vice president of manufacturing and quality of GM Thailand in 2009.

He was again promoted and made president and managing director of GM Uzbekistan in 2012. There he headed a 225,000-vehicle-capacity plant in Asaka and progressively converted it from a CKD assembler to becoming a more integrated, self-sustaining operation.

Kazem joined GM India as chief operating officer in August 2015. He was promoted to president and managing director in January 2016.