GM’s Closing Its Gunsan Plant In South Korea

General Motors is in the process of slimming down its overseas operations. And the latest step involves closing one of its plants in South Korea.

The Gunsan plant has in recent years been used to manufacture the Chevy Cruze and Orlando. But it’s been running at about 20 percent of its total capacity for the last three years, “making continued operations unsustainable,” according to the automaker.

Shutting it down won’t be a simple matter, though. The facility includes a press shop, body shop, workshops for components like seats and air-conditioning, and an on-site proving ground. Its closure is estimated to cost GM Korea some $850 million.

Gunsan is one of four assembly plants that GM operates in the country, along with four additional engine factories, design and engineering facilities, and a larger proving ground. The sites fall under the auspices of GM Korea, the division formed after the company acquired Daewoo Motors in 2002. The plant’s closure is part of a more comprehensive turnaround plan for the division.

“This is a necessary but difficult first step in our efforts to restructure our operations in South Korea. We recognize the contribution and support of our employees, the wider Gunsan and Jeonbuk communities and government leaders, particularly through the most recent difficult period,” said Kaher Kazem, president and CEO of GM Korea. “We are committed to supporting all of our affected employees through this transition.”

GM Korea isn’t the only overseas division under review. The industrial giant recently shut down its manufacturing operations in Australia and sold off most of its European operations as well.

“The performance of our operations in South Korea needs to be urgently addressed by GM Korea and its key stakeholders. As we are at a critical juncture of needing to make product allocation decisions, the ongoing discussions must demonstrate significant progress by the end of February, when GM will make important decisions on next steps,” said Barry Engle, president of GM International.