Source: Cruze may be built in Europe
SEOUL -- General Motors said it won't build the next-generation Chevrolet Cruze in Korea, raising the possibility that it might shift production to Europe to help boost efficiency at its money-losing Opel unit.
Last week, a GM Korea spokesman confirmed statements by local labor union officials that the revamped Cruze will not be built in South Korea, but he did not provide details.
GM Korea head Sergio Rocha recently disclosed the decision to the company's South Korean union, union spokesman Choi Jong-hak said. Rocha said the new model will be built in five regions, including Europe, the United States and China, according to Choi.
Besides South Korea, GM builds the Cruze in the United States, China and Brazil and in smaller numbers in several other countries.
The decision is part of GM's efforts to manage its global manufacturing footprint better, GM Korea spokesman Park Hae-ho said.
The current Cruze model line accounts for 50 to 60 percent of about 260,000 vehicles built at GM Korea's plant in Gunsan, Park said. The Chevy Orlando SUV and Lacetti small car also are built there.
The next-generation Cruze, due in late 2014, will be the first vehicle to use a GM global platform that could underpin 2.5 million compact sedans and crossovers by 2018, sources previously told Reuters.
In December, GM CEO Dan Akerson floated the idea that more cost-cutting at Opel in Germany could be accompanied by shifting production to the region from Asia.
GM's European unit has lost money for 12 consecutive years, and GM is scrambling to cut costs and boost efficiency in the region. On Oct. 31 it said it expected a loss of as much as $1.8 billion in Europe this year and was targeting a return to breakeven in the region by mid-decade.
GM said last month that it wanted to buy a stake in its South Korean operations from the unit's second-biggest shareholder, Korea Development Bank. GM owns close to 77 percent of GM Korea, but the bank's 17 percent holding gives it the right to veto decisions made by the automaker.