GM to close 1 of 4 plants in South Korea

The Gunsan plant has produced several GM models including the Chevy Orlando shown here

The Gunsan plant has produced several GM models including the Chevy Orlando shown here

Local critics suspect that GM may have taken more than 3 trillion won ($2.78 billion) from its Korean arm since the acquisition in 2002 under the pretext of interest, vehicle parts, research and development costs and dividends. -South Korea trade agreement.

GM slipped 0.2 percent to $41.93 as of 9:35 a.m. Tuesday in NY.

For its part, the Seoul government said it would order the state-owned Korea Development Bank, which holds a 17% stake in GM Korea to conduct a thorough analysis of its management over the past years. "Believe me. You wouldn't be hearing that, so they're moving back from Korea to Detroit", Trump said during a trade-related meeting at the White House on Tuesday, hinting his "America First" governance agenda had affected the closure of the plant.

The company is in talks with union officials, government and GM Korea shareholders about the cost cuts needed to keep other plants in the country operating.

"Time is short and everyone must move with urgency", Ammann said.

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"We stand ready to engage", he said.

Adding to GM's ammo, the automaker can point to other moves it has made since CEO Mary Barra came onboard four years ago. The government was expecting GM to propose a restructuring plan, not announce a decision to shutter a major plant, an official said.

The company started closing down operations in unprofitable regions including Europe, Australia, South Africa and Russian Federation, since 2015.

GM will also take a non-cash one-time charge of about $475 million in "asset impairments", essentially a writedown of the value of the facility.

According to media reports, GM had asked for government support to help it increase capital by acquiring newly issued stocks, which would cost some 500 billion won. Most of the financial writedowns would be recorded by the end of the second quarter.

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South Korea has been a low-priced vehicle export destination for the firm with a vehicle production estimated at one-fifth of its global automobile production. Excluding profits from China, GM said its Asian operations lost money in 2016, according to Reuters. Chevy is the number-one foreign brand in the country, and the carmaker sold about half a million vehicles in the region in 2017, so there's ample justification to stick around - if the business can be sorted out.

GM saw the acquisition as an opportunity to produce both for the booming Korean domestic market while also exporting vehicles to the USA and other markets with high labor costs.

"GM is not waiting for another global downturn to make these decisions", Sullivan said.

The Gunsan plant will close at the end of May after what the company claims is three years of running at only 20% of its designed capacity.

"This is a necessary but hard first step in our efforts to restructure our operations in South Korea", said Kaher Kazem, president and CEO of GM Korea. GM owns 77 percent of the operations while GM's main Chinese partner, SAIC Motor Corp., controls 6 percent.

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