[Herald Interview] ‘GM here for future,’ not leaving Korea

BUPYEONG, Gyeonggi Province -- Amid market rumors of General Motors pulling out from South Korea, the GM Korea vice president said the US automaker is here for the future, stressing the country’s role as a strategic hub.

In an exclusive interview with The Korea Herald, Dale Sullivan, vice president of vehicle sales, service and marketing at GM Korea, said the company is set to reach 1 million sales for its Chevrolet vehicles here in August, marking the shortest time among GM operations in emerging markets.

Calling it “a milestone,” the figure shows why GM wants to stay here, he said.

“Next month, we go over a million sales for Chevrolet since its introduction. One million sales of Chevrolet from 2011 till now,” said Sullivan at the automaker’s headquarters in Bupyeong, just west of Seoul.

“A million is a big number and we can build on that, we can build for the future.”

There had been market rumors of GM’s withdrawal from Korea, as the automaker has struggled with sales in the first half and faced worsening conflicts with labor. Then came the unexpected resignation of its CEO James Kim earlier this month.

“A lot of people think we are not here for the future. But we are here for the future, we have products for the future, we have made our cuts that we needed to for General Motors and looked for where our profitability is,” he said, adding that Kim leaving GM Korea was a personal decision.

As of July, GM Korea had sold over 980,000 units of Chevrolet vehicles in Korea. It sports a full lineup here from compact cars to sport utility vehicles.

South Korea is the fifth-largest market for Chevrolet. The brand has been gaining strength here, as demonstrated by the surprising sales of its sedan Malibu, with over 30,000 of the sleek sedan sold last year. The Bolt EV, an electric vehicle that goes 383 kilometers on a charge, sold out within two hours of its debut in April.

And the automaker will bring in more hit vehicles soon, perhaps even the next Trax, said Sullivan.

“SUV and CUV (crossover utility vehicle) markets are big and we need to have the next Trax, I won’t say a replacement of Trax, but an SUV that (would) really do well,” he said.

“We do have such plans, there’s no reason for us to pull out from Korea. What we are doing is to show how GM is taking its operation in Korea seriously. You are going to see more of winning products in GM Korea.”

In 2002, GM acquired Daewoo Motor, formerly an auto unit of the now-defunct Daewoo Group. The state-run Korea Development Bank holds 17.02 percent of shares in GM Korea.

But provisions of the agreement between GM and KDB expire in October, raising concerns among unionized workers at GM Korea’s factories across the country. They are urging the government to stop GM if it decides to leave. Sullivan refuted the labor group’s claims that such rumors have long been cause for concern.

“It is a private agreement between us and them (KDB). The minority owner remembers there are a lot of issues that do not expire this year, and it is not going to really change the way we are doing business.”

Citing a direct comment from Stefan Jacoby, GM executive vice president and president of GM International, Sullivan said, “GM Korea is a global manufacturing, design and engineering hub for the company,” with 2,000 people just for engineering here.

A host of projects is currently underway to study how to improve profitability.

GM Korea has seen around 2 trillion won ($1.78 billion) in losses over the past three years, largely due to poor sales and demand shifting from compact cars to SUVs, which hit the automaker hard as it held a major share in the compact car market in South Korea.

Asked whether the losses involved workers demanding higher wages, the vice president stressed that higher costs are an issue faced not only by GM in Korea.

“I don’t think it is unique in GM, I think it is a Korean thing,” he said.

He added that in his study of Korean businesses and the automobile business in particular, those costs can be absorbed more quickly than for smaller companies, due to the products being more expensive.

Sullivan has been in charge of the automaker’s sales, marketing and customer service since February 2016. Prior to his role in South Korea, he was the director of the Chevrolet West Region in the US. He also launched the brand in China.

Koreans respond rapidly to changes in the auto industry, such as in the ways vehicles are purchased and used, observed Sullivan.

“Korean consumers are adapting to that (the changes) a lot quicker than I’ve seen in other markets. And I think it has to do with how fast the technology has happened here and that leads us to do a lot of things, like Bolt EV,” he said.

By Cho Chung-un (christory@heraldcorp.com)