GM Korea says development of subcompact SUV, new CUV will continue as planned

GM Korea, the South Korean unit of General Motors, said Friday that it remains committed to its plans to develop and manufacture its new subcompact sport utility vehicle and crossover utility vehicle in Korea.

The statement came in response to a local news report claiming that GM Technical Center Korea would retain rights over the new CUV but would transfer global engineering rights over the subcompact SUV to China. This would mean that the new SUV model is unlikely to be manufactured in Korea as previously announced, the report said.

The US automaker denied the claims, saying that its plans to put GM Technical Center Korea in charge of the global engineering of the two new vehicle models remain unchanged. Korea will continue to serve as the manufacturing site for the two models as well.

“Such plans were announced in December 18 at the time of the formation of GM Technical Center Korea Co., and they remain unchanged,” GM Korea said in the statement.

GM Korea’s labor union had argued, via the local news outlet, that the development and production of GM’s subcompact SUV model would be transferred to China for the sake of efficiency.

GM Technical Center Korea was established last year after GM and the state-run Korea Development Bank -- the second-largest shareholder in GM Korea with a 17.02 percent stake -- agreed on the deal as part of the company’s viability plan.

However, GM Korea’s 7,000-member labor union has remained hostile to the idea of a R&D company separate from GM Korea’s production facilities here, viewing it as a step by the US carmaker to scale down its business here in the long term.

By Sohn Ji-young (jys@heraldcorp.com)