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GM Korea posts worst ever earnings in 2015: sources

All News 10:20 April 10, 2016

SEOUL, April 10 (Yonhap) -- GM Korea Co., the local unit of U.S. carmaker General Motors Co., logged the worst ever business performance since its launch here amid weak sales coupled with a continued rise in labor costs, industry and company sources said Sunday.

According to the sources, GM Korea registered 986.8 billion won (US$855.3 million) in net loss last year and 594.4 billion won in operating loss on annual sales of 11.94 trillion won. The nearly 1 trillion won worth of net loss widened considerably from the 353.5 billion won in the red the previous year.

"It is true that last year's earnings were the worst ever since we started operation here," a GM Korea official said. GM Korea started its business in South Korea back in 2002.

Last year's lackluster earnings were attributed to a one-off factor stemming from the pullout of the Chevrolet brand from Russia, steady rise in labor costs and toughening business conditions in major export markets.

GM Korea sold around 622,000 cars at home and abroad last year, down 1.4 percent from a year earlier.

Faced with the worsening business performance, GM Korea has been ramping up its cost-cutting efforts. In early 2015, the automaker received applications from its workers for early retirement.

Recently, it also decided to keep importing its popular Impala sedan, citing economic merits that it has over a possible local production using its plant here, a scheme that its labor union has sought.

The decision came after a months-long debate over its possible local production with some, including its labor union, raising the need to secure a more stable and timely supply and meet growing demand. The Impala is currently produced at GM's Detroit plant.


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