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US- style saving: General Motors closes down the plant in Kunsan

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US- style saving: General Motors closes down the plant in Kunsan
February 13
09:00 2018

General Motors, an American industrial giant and a veteran of the world auto industry, again reduces its production capacity. This time, the South Korean plant, located in the coastal city of Kunsan, has become a target. According to the press release issued on behalf of the company’s management, the plant will cease to exist in May. About two thousand employees will lose their jobs. Thus, anticipated savings will amount to nearly 850 million US dollars per year.

This plant produced 36.5 thousand cars in 2017, which is 7% of the total volume of the vehicles produced by GM Korea.

By the way, GM Korea has three more factories besides one in question. In addition, the Korean unit of the concern can brag about engineering centers and the production of engines.

The closure of the plant in Korea is part of the program that was initiated and implemented by GM SEO Mary Barra. The purpose of the program is to optimize the financial flows of the company. To that end, GM has got rid of production facilities in south-east Asia, Western Europe, India and Russia. According to many experts of the automotive market, the measures taken by the new executive director will lead to the concern dependence on the Chinese market. That is where the oldest American manufacturer sells more cars than in any other country.

The analysts also note that Barra’s policy has led to the fact that the auto giant with more than a century of history is gradually losing its leading positions and currently ranks fourth in the global automotive market.

The three leaders at the moment are:

The leader is Volkswagen AG,

Toyota Motor Corp. takes the second place,

Nissan Motor Co. and Renault SA. are in third place.

We continue to monitor the situation with the auto concern General Motors. It is possible to predict depreciation of share prices of the American motor-car manufacturer in the near future.

 

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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