GM to sell closed South Korean plant to local consortium: sources

A logo of General Motors is pictured at its plant in Silao, in Guanajuato state, Mexico, November 9, 2017. REUTERS/Edgard Garrido

SEOUL (Reuters) – General Motors is expected to sign a deal to sell its shuttered factory in the South Korean city of Gunsan to a local consortium of auto parts makers, two sources with direct knowledge of the matter told Reuters on Friday.

The governor of Jeonbuk province where the factory is located, Song Ha-jin, would hold a press conference on the sale at 1:30 p.m. (0430 GMT) on Friday, one source said.

Another person declined to comment on the value of the deal, but said it would be lower than the liquidation value of the plant which is about 250 billion won ($219.9 million).

He said the consortium, which includes parts maker MS Autotech, was in talks with an unidentified automaker to manufacture electric vehicles at the facility, and aimed to start production in 2021 with initial production capacity of 50,000 vehicles a year.

He said GM and the consortium aim to finalize the sales by June.

The plant could take advantage of South Korea’s free trade deal with the United States and Europe, as well as the country’s electric car supply chain, he said.

An GM Korea spokeswoman declined to comment, while an MS Autotech official was not available to comment.

GM closed one of its four South Korean plants last year and let go thousands of workers, as part of a global restructuring drive.

Its loss-making South Korean unit has been reeling from the automaker’s exit from Europe, a major export market, and GM executives have complained about labor costs and disputes.

Reporting by Hyunjoo Jin; Editing by Stephen Coates

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