GM has sold one its factories in South Korea to Myongshin, a supplier to Tesla and Hyundai, who plans to turn it into an EV manufacturing facility.
The news was confirmed by Myongshin, telling Reuters that it will pay GM $99.5 million for the land and buildings of the Gunsan facility on June 28. GM Korea confirmed the deal by saying “We aim to close this deal as soon as possible to ensure that there will be ongoing economic activity,” in a statement.
Myongshin is part of a larger group of companies that plan to initially spend $176 million on the ex-GM factory to produce 50,000 electric vehicles in 2021 and 150,000 electric vehicles from 2025 onwards.
The Korean company was negotiating with an unidentified global car maker in order to manufacture EVs for them at the Gunsan factory, according to a source with direct knowledge of the matter. The source added that the car maker in question was not Tesla.
The revamped factory poses as an attractive solution for EV manufacturing, thanks to South Korea’s free trade deal with the United States and Europe. Myongshin will create 900 new jobs and another 2,000 for its suppliers.
GM’s loss-making operations in South Korea used to play a key role in Asia, but they have been hit hard by the company’s decision to withdraw from Europe, one of their biggest export markets.