Seong Joon Cho | Bloomberg | Getty Images
General Motors’ Chevrolet Bolt stand on display during the press day of the Seoul Motor Show in Goyang, South Korea, on Thursday, March 30, 2017.
General Motors has agreed to set up its Asia-Pacific headquarters in South Korea, in a further commitment by the U.S. automaker to its loss-doing local unit, the government said on Thursday.
Under a preliminary agreement, GM will also buy more parts by South Korean suppliers for its overseas operations, boosting procurement by about 2 trillion won ($1.85 billion) a year at present, the industry ministry said in a statement.
In return, South Korea will provide funding to local suppliers of GM as well as additional South Korean automakers for the development of parts for electric as well as self-driving cars, as well as additional key automotive parts.
The statement did not give a figure for the level of support, however a ministry official said the idea might be worth a combined tens of millions of dollars.
GM agreed last month to keep its local arm afloat after coming close to seeking bankruptcy protection. The firm won major concessions by its labor union on wages as well as benefits as well as secured a planned $750 million in funding by state-run Korea Development Bank.
The fresh regional headquarters will oversee production, sales as well as technology development for Asia Pacific countries, which excludes China, however includes Australia, India as well as Thailand among
others, a ministry official told Reuters.
GM had previously operated its regional headquarters for “GM International” in Singapore, which covered South Korea, Australia, Southeast Asia, India, the Middle East as well as Africa.
However, the automaker slashed headcount at the Singapore office last year as part of a restructuring to focus on fewer, more profitable markets like China as well as the United States.
GM has stopped manufacturing in Australia as well as Indonesia, as well as significantly restructured its Thai operations. The company has also restructured operations in India as well as South Africa.
South Korea was also hit by the revamp, with GM planning to shut down one of four local factories This particular month as well as reduce its local workforce by nearly 3,000 positions.