Daewoo Incheon Motor, which makes cars for General Motors under contract, will return to two-shift operations at one of its two plants at the Bupyong, South Korea, complex for the first time since August 1999, according to Automotive News.
The motor industry newspaper noted that Daewoo Incheon was set up by creditors of the former Daewoo Motor to operate the Bupyong plant, the bankrupt car maker’s oldest and biggest manufacturing site and that GM excluded the complex from the agreement that created GM Daewoo Auto & Technology last October, but agreed to purchase its output for the next six years.
According to Automotive News, GM also said it would consider purchasing the plant outright if certain productivity and quality standards were met while the plant maintained peaceful management-labour relations.
The return to two-shift operations at the plant, near Seoul, draws GM one step closer to taking over the plant, analysts told the paper.
“It’s obvious that this could help GM decide to buy the Bupyong plant,” Kim Sang-Ik, a motor industry analyst at Daishin Securities in Seoul, told Automotive News, adding: “More immediately, it will help GM Daewoo offset sluggish local sales through exports.”
According to the report, Daewoo Incheon said the second shift will double output of the Kalos subcompact to 800 units a day to meet growing demand from North America and Western Europe while the company also said it plans to reintroduce a second shift at Bupyong’s Plant 2, which produces the Magnus mid-sized sedan.
Daewoo Incheon recently rehired 716 laid-off workers, and said it will being back 200 more in the third quarter of next year, Automotive News noted.