GM lifts travel ban to Korean unit

In this Dec. 11, 2017, file photo, General Motors Chairman and CEO Mary T. Barra is interviewed by Cox Automotive's Michelle Krebs during an Automotive Press Association event in Detroit. / AP-Yonhap

By Nam Hyun-woo

General Motors has lifted a ban restricting its employees from traveling to GM Korea, signaling the U.S. headquarters is gearing up to facilitate the normalization of its Korean unit.

GM Korea said Thursday its Detroit-based headquarters recently lifted the ban, which went into effect last month, due to security concerns as union members here used violence to protest company restructuring.

“It is true the company has lifted the ban,” a GM Korea official said without elaborating further.

On April 13, it was reported that GM headquarters told its executives and employees worldwide -- except those in Korea -- not to visit GM Korea offices and factories. It was widely interpreted as the headquarters' hard-line response after a sit-in and violence by GM Korea union members.

On April 5, leaders of the union stormed into GM Korea CEO Kaher Kazem's office and staged a two-day sit-in, while destroying some equipment. The union was disgruntled after Kazem said the company had to skip incentives scheduled for April 6 because of a liquidity crunch.

GM Chairman and CEO Mary T. Barra said in an interview in February that “GM's future plans may result in some rationalization actions or restructuring that potentially could have a material impact on our results,” which was widely interpreted that GM may no longer be interested in operating plants in Korea.

However, the lifting of the ban is interpreted as a change in the headquarters' view on the loss-making Korean unit, as GM Korea is showing a series of efforts to put its operation back on track, as the Korean government agreed to financially support GM Korea, and the company reached a labor-management agreement.

GM Korea has been struggling with financial difficulties, with its headquarters in Detroit announcing a plan to shut down the plant in Gunsan, North Jeolla Province, which closed Thursday. It also requested that state-run Korea Development Bank (KDB) provide financial support for the Korean unit.

After staging a tug-of-war between creditors and its labor union, the company announced the normalization of its business operations after GM and KDB, which is also a major GM Korea stakeholder, agreed to the rescue capital.

In its normalization plan, GM Korea expects to turn a profit by 2019 and pledged to start making 15 new cars and upgraded models here in the next five years to show its commitment to the Korean market. It released the upgraded Chevrolet Spark earlier this month as the first new model after the deal.

In June, GM Korea will also showcase the third Equinox at the 2018 Busan International Motor Show slated for June 8 to 17.

The third generation Equinox was released in the U.S. market last year, with sales of more than 300,000 last year.

Also at the show, GM Korea will reveal the results of its survey asking that Chevrolet cars Koreans want to see on the road here. Kazem has said the company will manufacture cars which are popular with Koreans.