General Motors Might Dump Its Sagging South Korea Operation Next

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Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.

1st Gear: 안녕

First Opel, now General Motors Korea. GM CEO Mary Barra is on a cost-cutting warpath, and now it’s the old Daewoo operations’ turn. GM made its major move into South Korean manufacturing when it bought Daewoo Motors in 2002, and now that may be coming to an end. The General just announced it’s closing its factory in Gunsan, South Korea, which makes the Cruze and a sort of mini-minivan called the Orlando (you should still be able to buy a Cruze in America, though, as our Cruze is built in Lordstown, Ohio). From the press release:

GM Korea Company (GM Korea) announced today that it will cease production and close its Gunsan plant by the end of May 2018. The Gunsan facility has been increasingly underutilized, running at about 20 percent of capacity over the past three years, making continued operations unsustainable.

And then the release goes on to make some threatening noises, which should be viewed in the context that GM is currently in negotiations with its South Korean workers for higher wages:

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.

“The performance of our operations in South Korea needs to be urgently addressed by GM Korea and its key stakeholders. As we are at a critical juncture of needing to make product allocation decisions, the ongoing discussions must demonstrate significant progress by the end of February, when GM will make important decisions on next steps,” said Barry Engle, GM executive vice president and president of GM International.

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If you’re having trouble reading between the lines, the “critical juncture of needing to make product allocation decisions” and “important decisions on next steps” almost certainly refer to a pull-out from the Korean market.

GM maintains less than 10 percent market share in South Korea, the >Financial Times notes, where the market is overwhelmingly dominated by Hyundai and Kia. It doesn’t help, either, that GM lost money on its Korean unit for the past three years running after it shut down its Chevrolet brand in Europe–mostly made up of small cars built at, you guessed it, GM Korea–right around then, too.

And while you may not think this affects you just yet, think of the Chevy Spark.

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Alright, so you haven’t thought of the Chevy Spark in years, if at all. But it’s made by GM Korea, and if GM pulls out of the country, we may lose our small car friend forever. Or, at least, until you buy it off a dealer’s pre-owned lot.

2nd Gear: Dealers Are Selling Fewer And Fewer Cars

Official car sales numbers are quite a complex thing, but it’s not really just “here’s how many cars Company X sold to customers, who are people like you.” They’re dependent on how many cars were shipped, they don’t really indicate if cars are sitting on dealer lots, and they don’t always tell you how much of those sales numbers were to massive car fleets.

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What you need, then, is something called “dealer throughput.” And that’s down, >Automotive News reports:

U.S. dealership throughput — the average number of new-vehicle sales per dealership — is expected to slip 2.9 percent to 920 vehicles in 2018 from 947 in 2017, automotive consulting firm Urban Science predicts.

If so, 2018 would have the third consecutive decline in per-store sales, Urban Science’s annual Automotive Franchise Activity Report said.

U.S. dealership new-vehicle throughput slipped 1.9 percent in 2017 to 947, from 965 in 2016 and from a high of 966 in 2015, as sales fell and the number of dealerships edged up.

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I’m gonna get real for a second, and feel free to yell at me in the comments because I’m not going to read them. The cost of the Republican corporate tax cut would have paid for the U.S. government to cancel out American student debt in its entirety, down to the last penny. If we could afford cars, then we can buy cars.

3rd Gear: Please Do Not Drive Some Of Your Older Ford Rangers

Don’t drive your 2006 Ford Ranger or Mazda B-Series, as their Takata airbags are no good, >Reuters says:

The National Highway Traffic Safety Administration (NHTSA) said the vehicles pose “an immediate risk to safety” and urged owners to immediately schedule a free repair.

Ford and Mazda have replacement air bag inflators available now and will tow vehicles to a dealership for repairs as well as provide loaner vehicles free of charge, the companies and NHTSA said. About 90 percent of the vehicles subject to the “Do Not Drive” warning are in the United States.

Two U.S. senators in January questioned why Ford’s warning only applied to a small number of the 391,000 2004-2006 Ranger trucks recalled because of Takata air bags in 2016 in the United States.

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Check whether or not your pickup is affected here, and if it is, for the love of all that is holy stop driving it right now. Also, why are you reading this while driving? Kinda dangerous if you ask me, friend.

4th Gear: Mercedes Is Officially Out Of The Detroit Auto Show

Mercedes has historically been a big anchor at a lot of auto shows, but now it’s officially pulling out of the biggest American one of them all, the >Detroit News says:

Mercedes-Benz is not coming to the Detroit auto show in 2019, officials at the show confirmed.

The move by Daimler AG, Mercedes’ parent company, is part of a larger trend in the automotive industry. Automakers are increasingly opting to unveil new products at their own special events when they don’t have to share the spotlight, or at tech events when more of the Silicon Valley media is present.

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On the one hand, I get it. If you feel like the primary job of an auto show is to drop a new car, why spend the day doing it with 17 other car companies all rapid-fire?

On the other hand, if you view the auto show as an opportunity for the seething unwashed masses to crawl all over your cars and hopefully find the inspiration to buy one, then maybe this is not as good. But clearly Mercedes isn’t too worried about the unwashed masses.

5th Gear: London ‘Not Ready’ For Driverless Cars

London is “not ready” for driverless cars and won’t be until the 2030s, according to a new report via >Bloomberg:

London is ill-prepared to become an early adopter of cutting-edge transport technology including driverless cars and retail deliveries by drone, according to the city’s lawmakers.

While the U.K. government has predicted that connected and autonomous vehicles, or CAVs, will be on Britain’s roads by 2021, infrastructure and connectivity issues mean London is unlikely to see them until a decade later, the London Assembly’s transport committee said in a study released Tuesday.

“There is much hype around CAVs becoming a feature of our roads in the imminent future,” according to the report. “This is not likely to be the case, with 2030 to 2040 more realistic for widespread rollout.”

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That’s silly, though, because we will never have driverless cars.

Reverse: Who Doesn’t Love A Good Bump

While claiming the right of innocent passage through Soviet territorial waters in the Black Sea American cruiser USS >Yorktown and destroyer USS >Caron were bumped by Soviet warships.

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Neutral: What Would You Buy With No Student Loans?

If I didn’t have to make my $330 per month payment? Fiat 500 Abarth, easy. In blue.

Source : https://jalopnik.com/general-motors-might-be-pulling-out-of-south-korean-man-1822955953

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