Home Editors' Picks General Motors agrees to locate new Asia-Pacific headquarters in S. Korea
General Motors agrees to locate new Asia-Pacific headquarters in S. Korea
SEOUL — General Motors (GM) has agreed to set up its Asia-Pacific headquarters in South Korea, in a further commitment by the US automaker to its loss-making local unit, the government said on Thursday.
Under a preliminary agreement, GM will also buy more parts from South Korean suppliers for its overseas operations, boosting procurement from about 2 trillion won ($1.85 billion) a year at present, the industry ministry said in a statement.
In return, South Korea will provide funding to local suppliers of GM and other South Korean automakers for the development of parts for electric and self-driving cars, and other key automotive parts.
The statement did not give a figure for the level of support, but a ministry official said it would be worth a combined tens of millions of dollars.
GM agreed last month to keep its local arm afloat after coming close to seeking bankruptcy protection. The firm won major concessions from its labor union on wages and benefits and secured a planned $750 million in funding from state-run Korea Development Bank.
The new regional headquarters will oversee production, sales and technology development for Asia-Pacific countries, which excludes China, but includes Australia, India and Thailand among others, a ministry official told Reuters.
GM had previously operated its regional headquarters for “GM International” in Singapore, which covered South Korea, Australia, Southeast Asia, India, the Middle East and Africa.
However, the automaker slashed head count at the Singapore office last year as part of a restructuring to focus on fewer, more profitable markets like China and the United States.
GM has stopped manufacturing in Australia and Indonesia, and significantly restructured its Thai operations. The company has also restructured operations in India and South Africa.
South Korea was also hit by the revamp, with GM planning to shut down one of four local factories this month and reduce its local work force by nearly 3,000 positions. — Reuters