GM has been a success story for Korea FDI, however, the success story may have been more of a fairytale.
GM produces around 1/5 of its automobiles in Korea. According to
local media sources, management at the company is posed to lower
production in Korea because of rising labor costs in Korea that are
caused by bonuses being included in "regular wages," thus, increasing
severance obligations, a union that threatens to go on strike nearly
every year (last year all full-time employees received based on a threat
of strike a bonus of around USD 9,000) and increasing wages
GM has, already, decided to not produce
the new Chevy Cruise in Korea. The current model will, still, be
produced in Korea. It has been noted by NBC
that the development center for the Chevy Cruise has been moved from
Korea to a technical center near Detroit. A small SUV produced in Korea
and sold throughout Europe, seemingly, will have a similar fate.
What is the answer to this problem?
IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.