GM's Australia exit may benefit South Korean plants

GM\'s pull-out of vehicle production in Australia may help out its struggling South Korean operations.

General Motors' top international operations executive has indicated that the automaker may tap its assembly plants in South Korea to supply vehicles to Australia.

The Detroit-based car builder is in the midst of a major international operations shakeup. Not only did it hire ex-Volvo CEO Stefan Jacoby to head up its global manufacturing operations, the automaker announced plans to cease building cars in Australia and it said that it will soon begin phasing its Chevrolet brand out of Europe.

The decision to put an end to Chevrolet as a global brand initially left its South Korean assembly plants - which build most Chevy-badged cars sold in Europe - in flux, but now Jacoby says that GM vehicles bound for Australia may be sourced from South Korea.

"We are building our puzzle pieces together for the international markets," Jacoby said on the sidelines of the North American International Auto Show in Detroit this week.

These moves will undoubtedly keep GM's new international chief busy over the next couple of years as the automaker looks to shore up many of its money-losing global operations. Among GM's biggest markets, only North America and China have been consistent money makers lately. The financial recession in Europe has combined with high labor costs there and in Australia, where a strong currency is also a challenge for manufacturers, to force automakers to rethink their international strategies.

One thing that still remains unclear is the future of GM's rear-wheel-drive architecture, which was heavily developed in Australia and underpins cars like the Aussie-market Holden Commodore range and, in North America, the Chevrolet Camaro and Chevrolet SS. GM has been able to continue developing that platform due in part to the additional volume offered by the Australian market. However, the automaker's decision to stop building cars Down Under has left the platform's future something of a mystery.