The tense situation from North Korea is not only causing people all around the world to have unpleasant feelings of insecurity, as if there weren’t enough other things for them to think about, but it is also causing major corporations present in South Korea to consider the possibility of moving workers and shifting production out of the country.
The point was made by GM, as the American giant has officially expressed its concern on the matter, through the voice of its CEO, Dan Akerson, who was interviewed this morning on CNBC’s Squawk Box.
He said that “anything that goes on in Korea” is extremely important to their “global production.” That’s because GM is actually the third largest automaker in South Korea, where it employs 17,000 people who make 1.4 million vehicles per year. Around 1.3 million of the cars made by their five plants are exported to Europe and the U.S. – only a very small percentage of these cars actually stay in the country.
“We are making contingency plans for the safety of our employees to the extent that we can,” Akerson told CNBC. “Beyond that it’s difficult to shift production.”
However, a separate report from the Wall Street Journal said that Akerson has already decided to move production. “Mr. Akerson confirmed Thursday GM will shift production to other plants while warning that any problems in Korea will affect the entire automotive industry,” said the WSJ report.
Later, in response to a question about what would happen if the area destabilizes, Akerson told WSJ that the company would even consider allocating production not temporarily, but for the long term. “I think that’s fair. You’ve got to start to think about where you have the continuity, the supply and safety of your assets and your employees.”
Story References: Businessweek & MLive , Screentshot and Video Credits: CNBC
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