Union Miffed as GM Korea Shoots for Impala, Misses

Disappointing GM Korea workers who had pressed to build the Chevrolet Impala locally, General Motors announces it will continue importing the fullsize sedan from GM’s Hamtramck, MI, assembly plant.

Disheartened senior officials with the GM Korea branch of the Korean Metal Workers Union say GM Korea’s previous CEO, Sergio Rocha, had promised the automaker would produce the Impala in Korea if annual sales reached 10,000 units.

A union source says that when James Kim succeeded Rocha as CEO in January, he raised the target that would qualify the Impala for local production to 30,000 units.

GM Korea contends Rocha never made a concrete promise and, moreover, a volume of 10,000 vehicles was too low to generate a profit for a newly launched vehicle considering the competitiveness of the fullsize vehicle market and high labor costs at its Korean plants.

On the other hand, with the benefits of the new Korea-U.S. free-trade agreement, the Impala is being imported at an attractive price that is enabling it to make substantial inroads in Korea. It is holding its own in the competitive segment against the Hyundai Grandeur and Kia K7.

In some respects, selling the Impala in Korea could be viewed as a test case for exporting the model from the U.S. Korea is the first foreign market to begin selling it as an imported vehicle.

A GM Korea official tells WardsAuto the Impala has surpassed the 10,000-delivery mark since its sales launch in Korea in September. It sold 2,009 units in March and 4,815 in the first quarter, bringing cumulative sales to 11,728.

Despite losing out on Impala production, the company official confirms GM Korea soon will begin building the next-generation Malibu, with Korean sales launching in May. The new vehicle is expected to boost production at the Bupyeong plant, where the current-generation Malibu has been in production since 2011, when the former GM Daewoo Auto & Technology changed its name to GM Korea and all Korea-built vehicles were rebranded Chevrolets.

The union leadership had wanted the Impala to be produced in Bupyeong, a suburb of Incheon.

Malibu, Captiva Consolation Prizes

GM Korea also has launched output of the new Captiva at the Bupyeong plant. Although it has been selling in low volumes, the refreshed version is expected to achieve higher sales because of surging domestic demand for CUVs.

Unionists strenuously opposed importing the Impala from the U.S. Last autumn they tried to block driveways so the vehicle could not enter the Bupyeong production complex. They also brandished signs protesting the sale of a foreign-made vehicle in Korea when the Bupyeong plant was underutilized.

The Impala must undergo minor modifications and tuning at the Bupyeong facilities before it can be sold in Korea. It also had to be tuned and tested by GM Korea to meet rigid the country’s environmental requirements.

Kim said last month GM Korea plans to increase 2016 domestic sales about 20%, targeting 191,000 units, versus 158,404 deliveries in Korea last year. With that volume, he said, GM Korea’s share of the total domestic market would reach at least 10%.

March sales show the company is on its way to hitting its 2016 sales target. It sold 16,868 vehicles last month, a year-on-year improvement of 28%.

However, exports were down 4.4% on a yearly basis with shipments of 39,276 vehicles, excluding GM Korea’s sizable sales of complete-knocked-down units.

With the strong domestic market offsetting the export slump global sales totaled 56,144 units, up 3.4% from 54,305 from like-2015.

For first-quarter 2016 global deliveries were up 3.2%, with 149,948 vehicles sold.

Union officials say the Metal Workers Union plans to discuss the Impala situation with GM CEO Mary Barra this month. They contend the decision not to produce the Impala in Korea endangers the future of GM Korea, the livelihood of its 14,000 union members and the country’s economy.