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GM International President Barry Engle
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Barry Engle’s trip comes amidst speculation that the company plans to withdraw from the country
GM International President Barry Engle plans to visit South Korea shortly to meet with officials from the Ministry of Trade, Industry and Energy (MOTIE), the Financial Services Commission (FSC), and the Korea Development Bank (KDB). Engle’s visit is drawing particular attention for coming at a time of renewed speculation that GM plans to withdraw from South Korea. The speculation returned in the wake of a Feb. 6 conference call by General Motors chairperson and CEO Mary Barra with market investment analysts on Feb. 6, in which she declared that the company was “going to have to take actions going forward to have a viable business.” Barra added that the measures “may result in some rationalization actions or restructuring,” but said it was too early to say what they would be. But Bloomberg quoted an analyst as saying, “Given the prior history, my expectation would be an outright exit.” The “history” cited by Bloomberg is a reference to restructuring measures adopted by GM between late 2013 and 2017, including withdrawal from Europe, factory closures in Australia and Indonesia, production halts and cuts in Thailand and Russia, the sale of affiliate Opel, withdrawal from the Indian domestic demand market, and withdrawal of the Chevrolet brand from South Africa. GM Korea generated around 2 trillion won (US$1.84 billion) in net losses over the three years from 2014 to 2016, with a 2017 deficit estimated at around 600 billion won (US$552 million) – similar to 2016 levels. Amid the deteriorating performance, withdrawal speculation began heating up again in Oct. 2017 when second-largest shareholder KDB’s veto rights on asset sale lapsed. Engle, who is expected to visit South Korea in the near future, previously visited in late 2017 to meet with Minister of Trade, Industry and Energy Paik Un-kyu and officials with KDB and the Blue House. Many are now watching to see what proposals he makes during his upcoming visit. “The schedule has not yet been discussed, but [Engle] is expected to visit South Korea and meet with different officials,” a Blue House source said, adding that there had “not yet been any proposal.” A KDB source also said there had been “no proposal related to a GM Korea management normalization plan.” For this reason, some observers are speculating that GM may be leaking its own withdrawal speculation to pressure the South Korean government without fulfilling its own responsibilities for hiring and other areas. A GM Korea source explained that GM has “deemed cost-cutting as well as restructuring and other management normalization efforts necessary to overcome the management crisis GM Korea is facing.” “This position has already been stated by GM Korea president Kaher Kazem and is along the same lines as Barra’s perceptions,” the source said. Appearing before the National Assembly at a parliamentary audit last October, Kazem responded to speculation over GM Korea’s withdrawal with remarks to the effect that the company would strive to normalize its business situation.
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The GM Korea factory in the Bupyeong District of Incheon. (Hankyoreh Archive)
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