News Column

GM Making Contingency Plans in Case of Korea Crisis

Apil 5, 2013

Nathan Bomey

Dan Akerson

General Motors is closely watching the escalating tension on the Korean Peninsula and would consider shifting production if the situation deteriorates, GM CEO Dan Akerson said this morning.

"If there were something to happen in Korea, it's going to affect our entire industry, not just General Motors," Akerson said during an hour-long appearance on CNBC's "Squawk Box" program.

-- Related: GM to invest $332 million in plant upgrades, including 2 in Michigan

In the long-term, if producing vehicles in South Korea appears risky, GM would consider relocating vehicle assembly, Akerson said.

"I think that's fair," he said. "You've got to start to think about where you have the continuity, the supply and safety of your assets and your employees. It's a concern to everybody."

But Akerson said it would be hard to make any immediate changes to vehicle production in response to North Korean dictator Kim Jong Un's threats to deploy the country's nuclear arsenal.

"We are making contingency plans for the safety of our employees to the extent we can," Akerson said. "Beyond that it's difficult to shift production."

GM makes 145,000 vehicles in South Korea for sale to local customers and another 1.3 million for export to other markets, including the U.S. For example, the Chevrolet Spark minicar is made in South Korea and shipped to U.S. dealerships.

Akerson also:

-- Declined to call Japan a currency manipulator, saying the country's recent financial moves were "suspicious," but that GM can't fear a pricing advantage for the Japanese automakers because of currency policies.

-- Said the job market seems weaker than it's reported. "I do feel like it's worse than 7.7," he said of the U.S. unemployment rate.

Source: (c)2013 the Detroit Free Press. Distributed by MCT Information Services.

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