GM Korea Denies Plans to Outsource 1.3 Million-Unit CKD Export Business

GM Korea is denying reports by South Korean news media that it plans to outsource its entire complete-knocked-down-kit business to subcontractors in order to increase productivity and profitability.

The General Motors Korean subsidiary exported 1.28 million CKD vehicles to various markets in 2012, with a large share going to GM Shanghai plants in China. The assembly kits accounted for more than 60% of the 2 million vehicles GM Korea produced in the year.

“It is true that Tim Lee, the president of GM International Operations, met with employees last Friday to discuss ways to cooperate in meeting productivity and profitability sustainability goals, but there was no mention of outsourcing CKD vehicle production,” a spokesman tells WardsAuto.

A report in the Chosun Ilbo, Korea’s largest-circulation daily newspaper, says GM Korea will outsource all of the CKD business and lay off 1,000 workers engaged in its CKD operations through voluntary retirement and other means.

"The media reports are not true," the spokesman says.

“We are discussing with our workers and union officials ways to make the CKD operations and all operations more profitable through improved productivity. “Moreover, we have less than 500 employees engaged in CKD production.”

GM Korea operates a dedicated CKD facility in Incheon.