GM shelves plans to build Chevy Impalas in South Korea

Michael Martinez
The Detroit News

General Motors Co. is scrapping plans to build Chevrolet Impalas in South Korea for that market, and will instead continue to import them from Detroit, the automaker said.

GM last year considered making the full-size sedan in Korea for sale there, but rising labor costs and demand led the automaker to rethink the decision. It builds the full-size sedan at its Detroit-Hamtramck Assembly plant and has sold more than 10,000 Impalas in Korea since it started importing them six months ago.

“Following thorough and comprehensive research on the feasibility of localizing production of the Impala, the company has decided that it is more appropriate to continue to import the sedan in order to satisfy consumer demand,” GM said in a statement this week.

The automaker on Thursday confirmed reports that Korean labor union leaders have requested to meet with GM CEO Mary Barra within the month to discuss the situation.

The move is a contrast in strategy from Ford Motor Co.’s decision announced Tuesday to localize Everest midsize SUV production in South Africa with a $170 million investment, as opposed to importing Everests to South Africa from Thailand. Ford also angered the United Auto Workers and Republican presidential candidate Donald Trump Tuesday when it announced plans to build a new plant in Mexico, part of a growing trend of automakers pulling production of small cars out of the United States.

GM employs about 17,000 hourly and salaried workers in Korea and has four plants there that build Cadillac and Chevrolet products, as well as light commercial vehicles like the Damas and Labo. GM built about 615,000 vehicles in Korea in 2015, and the country for years has been a low-cost manufacturing center. But GM executives have said that labor costs have recently risen to nearly comparable levels with North America.

Stefan Jacoby, president of GM’s International Operations, said in October the company was only running at about 60 percent of available capacity in Korea and was considering whether to cut employees, shrink its operations or add more vehicles there.

The automaker exports vehicles like the Spark EV and Trax from Korea to the U.S., and used to export others to markets in Europe. But in December 2013, GM announced it would stop selling most Chevrolets in Europe. Last year, GM said it would largely pull out of Russia, stopping production and selling Opel vehicles and most Chevys.

The Korean Impalas come with two engine sizes: a 2.5-liter SIDI L4 and a 3.6-liter SIDI V-6. They include features unique to Korea: power folding side mirrors, electronic toll collecting system, fuel-fill cap locking, rain-sensing wipers, an unique cluster, standard navigation, an unique antenna, a 220-volt power outlet, rear audio controls and heated rear seats.

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