General Motors plans to produce two new models in South Korea, according to media reports.
According to Reuters, a local lawmaker quoted GM executive Barry Engle as revealing the plans at a meeting with South Korean members of parliament.
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Kim Sung-tae, who attended the meeting, reportedly said Engle, head of GM International, did not elaborate on whether GM’s plan for the two new car models were dependent on government support for the automaker.
GM announced earlier it would close its Gunsan plant and decide the fate of the remaining three plants within weeks.
After the announcement, South Korea’s finance minister had said the government would talk with GM over the future of the four South Korean plants.
“(The government) will come up with its own stance after we go over the company’s plan on normalisation, while continuing to have thorough discussions,” finance minister Kim Dong-yeon said.
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By GlobalDataHe added related government agencies were having close talks over this issue.
A separate Reuters report, citing anonymous sources, said GM had offered to convert debt of US$2.2bn owed by GM Korea into equity in exchange for financial support and tax benefits from the government. One source said the automaker had asked the government to provide over $1b, while several sources said GM wanted its South Korea factory sites designated as special foreign investment zones that would make the company eligible for tax breaks for seven years.
The news agency, citing a government spokesman, added Engle told lawmakers GM Korea would try to maintain output at the current level of around 500,000 vehicles a year after building 519,385 units last year versus 942,805 10 years ago.
Another Reuters report said the government had designated Gunsan a crisis zone for industry and employment, eligible for special government subsidies like cheap loans and financial support for those laid off.
Engle had previously urged GM Korea and stakeholders to show progress in ongoing discussions by the end of February, “as we are at a critical juncture of needing to make product allocation decisions”.
