Consumer confusion between the similarity of Opel and Chevrolet models, and under-utilization of European production capacity prompted General Motors to announce the pull-out of the Chevrolet brand from the European market starting in 2015. But Chevrolet’s pull-out from the Europe is proving to have repercussions far beyond the Continent. Many of the Chevrolet models sold in Europe were sourced from GM’s production facilities in South Korea. Chevrolet’s European pull-out is expected to impact GM Korea’s production volume by as much as 20 percent, and foreshadowing an uncertain future for the unit, according to Reuters.
GM Korea is offering a voluntary retirement package to its 6000 salaried workers, including 2200 employees in the research and design departments. GM Korea is tasked with engineering of the next-generation Chevrolet Spark due in 2015, but reportedly has no projects slated beyond that car’s launch.
A GM Korea employee speaking anonymously said, “This is the biggest crisis facing GM Korea since 2000.” GM acquired Daewoo Motors’ assets in 2002 following that company’s bankruptcy in 2000. Rising wages and a high standard of living have made the once low-cost South Korea an expensive manufacturing base, as native automaking juggernaut Hyundai-Kia seeks additional production capacity outside of South Korea.