January 19, 2012 / 9:05 AM / 6 years ago

UPDATE 1-GM Korea chief to meet union amid output shift talk - union official

* Interim CEO, union head to meet - union official

* Union will address reports of output shift - official

By Hyunjoo Jin

SEOUL, Jan 19 (Reuters) - The interim chief executive of the South Korean unit of General Motors Co plans to meet its union leader on Friday amid market talk of a possible shift of some production from the country to Europe, a union official said on Thursday.

Reuters reported earlier that GM could transfer some Chevrolet production from South Korea to Opel in Europe in a bid to salvage its struggling European unit.

“The union leader was invited today by (GM Korea’s interim chief executive) John Buttermore to meet on Friday morning ... and he plans to ask about reports on some production shifting out of Korea,” the official said.

A GM Korea spokesman declined to confirm the meeting, but said it was not unusual for a new chief executive to meet the union leader.

The move comes after GM earlier cancelled a planned meeting with its labour union, saying Buttermore was still making the transition into his role.

GM’s Korean unit announced on Friday that its head Mike Arcamone had resigned and production executive Buttermore would take over as interim chief, sparking media speculation that Buttermore may lead the production shift from Korea to Europe.

Arcamone will move to Canadian firm Bombardier Inc to head its commercial aircraft unit.

GM Korea said it did not comment on speculation.

“Our operations are flexible and running at healthy capacity at the moment. There is nothing to say beyond that,” GM Korea said in a statement.

An attempt to move production from Korea could face strong opposition from the government and GM’s local shareholder, Korea Development Bank.

Korea is a small market for GM, but one of the U.S. carmaker’s key production bases, exporting Chevy cars sold in Europe and accounting for about a quarter of its global production.

Chevrolet Europe President Wayne Brannon previously said that GM wanted to sell 1 million Chevrolet cars in Europe by 2016, from 477,000 in 2010.

In August, GM Chief Executive Dan Akerson said the company’s long-term strategy included plans to build Chevrolet cars in Europe, saying shipping Chevrolet cars into Europe was “maybe not the most efficient” method.

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