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(LEAD) GM signs MOU to sell S. Korean plant to local parts makers

Autos 11:21 March 29, 2019

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SEOUL, March 29 (Yonhap) -- General Motors Co. on Friday signed an initial deal with auto parts makers to sell off its shuttered plant in Gunsan, the U.S. automaker's South Korean unit said.

GM signed an initial agreement with a consortium, including Hyundai Autotech Co., to hand over the four-assembly-line factory in the industrial port city located 270 kilometers south of Seoul, GM Korea Co. said.

(LEAD) GM signs MOU to sell S. Korean plant to local parts makers - 1

The company didn't provide the value of the contract. The acquisition price reportedly reached 200 billion won (US$176 million) for the 260,000-unit-a-year plant.

The MS Autotech consortium plans to turn the plant into an original equipment manufacturer to produce electric vehicles (EVs) that will be marketed by other companies, industry sources said.

The consortium has recently attracted investment from a European carmaker that could lead to the production of EVs for both domestic sales and exports, they said.

MS Autotech could not be reached for comment on the deal.

MS Autotech, a major subcontractor of Hyundai Motor Co., began to supply hot stamping components to U.S. carmaker Tesla Motors Inc. last year.

The Detroit carmaker shut down the Gunsan plant in May last year due to low utilization rate and the need to cut back on outlays. The move was in line with GM's larger global reorganization programs.

The Gunsan plant, which opened 23 years ago, produced two Chevrolet models -- the Orlando SUV and the Cruze compact -- for sales at home and abroad. The GM plant and its 135 subcontractors hired a combined 13,000 workers, or 20 percent of the city's overall employement.

The closing down of the plant hit the city hard as it was already struggling with the closure of a Hyundai Heavy Industries shipyard in the same city in 2017.

GM Korea's Gunsan plant (Yonhap)

kyongae.choi@yna.co.kr
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