GM General Motors Company

By Mike Colias 

General Motors Co. has exited several markets under Chief Executive Mary Barra, including Europe and India. South Korea isn't joining that list even though it is a tough place for the Detroit auto maker to do business.

GM on Thursday outlined a new labor deal in South Korea that is expected to reverse persistent losses while salvaging the auto maker's presence in a market that has served as a key export hub and vehicle-engineering center. The auto maker's labor union in Korea ratified an agreement to trim as much as $500 million a year in costs and deliver black ink in 2019. GM also has a preliminary deal on a $750 million infusion from minority shareholder Korea Development Bank.

The labor deal and cash injection from the bank "set a foundation for viability in the future," Ms. Barra told analysts.

Exits or retreats from other operations in India, Russia, Europe and other countries have been part of Ms. Barra's focus on making bets only in markets and on product segments where GM thinks it can win. In Europe, for instance, GM lost money for more than a dozen consecutive years. It is also ditching unprofitable model lines, including the small Chevrolet Sonic and Impala family sedan.

There were reasons for the Detroit auto giant to retain its South Korean unit, which supplies several Asian markets and exports a few models to the U.S., including Buick and Chevrolet small sport utilities.

South Korea also includes one of GM's primary vehicle-design and engineering centers. The facility led the development of the Chevrolet Bolt electric car, rolled out in 2016 as the industry's first relatively affordable electric vehicle that can travel more than 200 miles on a single charge.

Still, GM Korea's importance as an export hub has waned since GM acquired the former Daewoo Motor Co. in 2002. GM spent a decade exporting rebadged Daewoo cars to Europe in a bid to establish Chevrolet there but pulled the brand out in 2014, leaving Korea with unused factory capacity.

GM executives said the closure of one of its four Korean plants and the addition of two new vehicle programs will keep the remaining factories busier. It cut its workforce by nearly 25%, to about 13,000 employees.

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

April 26, 2018 13:41 ET (17:41 GMT)

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