South Korea Agrees To Bail Out GM Unit And Save 2600 Jobs

General Motors and South Korea have agreed to inject $4.35 billions into the carmaker’s loss-making local arm to keep it afloat after it came close to seeking bankruptcy protection.

GM has been struggling to turn round the debt-laden unit, which has been hit by GM’s exit from Europe where it used to export many of its cars. GM Korea has announced plans to close one of its four South Korean plants and let go 2,600 workers.

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PUGPROUD - 4/27/2018 4:49:20 PM

+1 Boost

"Too big to fail" solutions are quick fixes but not cures. Let the market determine winners and losers. The 2600 jobs can be redirected to smaller more dynamic enterprises looking for experienced, skilled labor.

TheSteve - 4/27/2018 4:51:48 PM

+3 Boost

Wow! For interested parties, look into how Australia poured billions into Holden (AKA GM) to continue and expand auto manufacturing in Australia. After about a decade of pouring a mountain of taxpayer money into Holden (GM), an internal government audit discovered that Australian taxpayers got a dismal return on their "investment." The Australian government refused to pour more money into Holden (GM). Holden (GM) is shutting down operations in Australia.

BTW, Holden (GM) sales in Australia have been in the toilet, and getting worse for many years.

MDarringer - 4/27/2018 10:30:15 PM

+1 Boost

If GM Korea can build cars people want, there should be no issue to keeping production afloat.

TomM - 4/28/2018 10:11:17 AM

+2 Boost

Korea has a real problem - similar to what Japan went through when Korea first started selling cars around the world.

THey are no longer a cost effective place to produce cars. Based on salary and benefits - it is far cheaper to produce cars in other places in Asia - and eventually they will move to Africa as well. THis also extends to OTHER products from Korea as well. And just as Japan's economy has gone into a long term Malaise - because of globalization of production - and producing things outside Japan - the same will happen with South Korea. And while this happens in every economic powerhouse country eventually - it is how the country moves towards a service economy that makes the difference. This has already happened for the most part in the USA - and Germany - England - and others. For a while it can cause real Havoc similar to what will soon happen in the USA again when the remaining manufacturing jobs are lost to automation. THESE generally untrained entry level positions (in the total economy) are disappearing - and along with them - the middle class is as well.

THe problem is one of training and retraining. Moving an AUTOMOTIVE assemblyline worker to electronic production is a process. ANd the fact is - some workers do not adapt well - others are simply too old to make it a reality - and others simply do not have the intelligence to do so.