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Japan quake leads GM Korea to cut production

Stalled supply of Japanese parts forces carmaker to prune factory hours

AFP, Monday 21 Mar 2011
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The South Korean unit of General Motors said Monday it would reduce production this week by up to 10 per cent because of a possible lack of parts from Japan following the devastating earthquake.

GM Korea -- formerly GM Daewoo -- said it would stop four hours a day of overtime work from Monday at its plants in the western city of Bupyeong and in the southwestern port of Gunsan.

The company said it would also suspend eight hours a day of extra work during the weekend at Gunsan. But it will maintain its current work schedule at its plant in the southern city of Changwon.

"Overall, up to 10 per cent of production will be reduced," a GM Korea spokesman told AFP.

"The move is temporary, and our company will decide whether to reduce production next week while watching the situation in Japan," he said.

GM owns a 70.1 per cent stake in GM Korea, the manufacturing base for smaller vehicles for the Detroit-based carmaker. Its market share in South Korea was just around eight percent last year.

South Korea's top automaker Hyundai Motor and its affiliate Kia Motors said they have not been affected by the 11 March quake and tsunami in Japan.

Hyundai and Kia together form the world's fifth-largest carmaking group by sales. They use only about one per cent of parts from Japan.

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