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GM Korea Chairman Kaher Kazem at a parliamentary audit hearing by the National Assembly Trade, Industry, Energy and SMEs and Startups Committee on Oct. 29. (Yonhap News)
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Kaher Kazem insists R&D corporate split is part of “upgrade” in parliamentary audit hearing
GM Korea Chairman Kaher Kazem denied rumors of the automaker’s plans to pull out of South Korea, which surfaced with the decision to split off GM Korea’s production and R&D sectors and establish them as part of a separate corporation. Appearing as a witness at a parliamentary audit hearing on Oct. 29 by the National Assembly Trade, Industry, Energy, SMEs and Startups Committee, Kazem was asked by Party for Democracy and Peace lawmaker Cho Bae-sook whether the corporation split was “part of a preliminary effort for GM Korea’s withdrawal [from South Korea].” In his response, Kazem said GM had no plans to withdraw from South Korea. Kazem also stated that GM had repeatedly expressed its intent to remain in South Korea, with GM Korea to upgrade its production facilities and play an important role in the export market. When asked by Cho whether he would be “willing to promise to keep on employees” after the company split, Kazem affirmed that all employees in the current R&D sector would be carried over. Kazem’s decision to appear before the National Assembly and actively explain the corporation split issue appeared based on a determination that the company head needed to step forward to quiet speculation about GM pulling out of South Korea. Kazem was previously selected as a witness for a parliamentary audit by the same committee on Oct. 10, but did not attend, citing the potential influence on an injunction application filed by Korea Development Bank (KDB) to prohibit a general shareholders’ meeting from being held to approve the split. GM CEO indicates plan to visit South Korea Meanwhile, GM CEO Mary Barra was revealed to have recently sent a letter to the GM Korea labor union expressing her intent to visit South Korea. In the text disclosed by the union on Oct. 29, Barra wrote, “The creation of a dedicated engineering services company will [. . .] further strengthen GM's long-term ties to Korea.” “We think the demerger is an important step to allow both the engineering services company and the manufacturing unit to stand on their own as profitable, viable businesses,” she also said. “I would like to visit our Korea operation at some point soon,” she continued. On Oct. 23, the GM Korea sent a letter to Barra questioning the fairness of the company’s R&D corporation split and requesting to meet with her. “No concrete plans for a South Korea visit have yet been discussed,” a GM Korea official said. Industry observers are now watching to see what solution Barra presents to quiet speculation over GM’s plans to pull out of South Korea if she does visit. By Hong Dae-seon and Choi Ha-yan, staff reporters Please direct comments or questions to [english@hani.co.kr]
