GM Korea announces first step in restructuring, closing Gunsan plant
GM Korea announced that it will cease production and close its Gunsan plant by the end of May. The Gunsan facility has been increasingly underutilized, running at about 20% of capacity over the past three years, making continued operations unsustainable. This announcement occurs after a careful review of the company's operations, which have sustained significant losses for the past several years. GM has been aggressively addressing underperforming businesses globally, and is now focused on finding a solution for its South Korean operations. The company has proposed to its key stakeholders - including its labor union, the South Korean Government and key GM Korea shareholders - a concrete plan to stay in the country and turn the business around that requires the full support of all parties. The proposal includes significant product-related investments in South Korea and would preserve thousands of jobs. As a result of this action, GM expects to take charges of up to $850M, including approximately $475M of non-cash asset impairments and up to $375M of primarily employee-related cash expenses. Substantially all of these charges will be recorded by the end of the second quarter of 2018, and will be treated as special and excluded from the company's EBIT-adjusted and EPS-diluted-adjusted results.