The US automaker's plan, which already appears to have been put into action with recent decisions to shift production of newer models away from South Korea, highlights complaints from both local and foreign carmakers about rapidly rising wage costs in the world's seventhlargest exporting nation.
"We need to make sure we mitigate risk in (South Korea), not over the next 23 years but over time, not to become too dependent on one product source," said one of the sources who declined to be identified due to the sensitivity of the matter.
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"If something goes wrong in Korea, whether it is cost, politics, or unions, it has an immediate impact."
GM made South Korea one of its main production hubs after its 2002 purchase of failed local carmaker Daewoo Motors.
The country accounts for slightly more than 20 percent of GM's annual global production of some 9.5 million cars.
More than 80 percent of those GM cars made in the country are exported.
The sources, all privy to high-level discussions inside GM about the future of its South Korean strategy, said labour costs had risen sharply over the past decade, turning the country into a highcost base a problem exacerbated by the South Korean currency's relative strength over the past year.
GM Korea's labour union disagrees and believes GM's talk of reducing its presence is a bluff designed to intimidate workers against seeking further pay hikes. Last month, GM Korea reached an annual wage settlement that included bonuses of 10 million won ($9,000) per member, according to the GM Korea labour union.
"Our view is that management is making threats to pressure us and make us cooperate," union spokesman Choi Jonghak said.
However, GM appears to have already begun easing its reliance on South Korea, leading some union leaders to tell Reuters on condition of anonymity that they fear an eventual shuttering of some GM factories in the country.
GM told its South Korean labour union late last year it would not produce the nextgeneration Chevrolet Cruze, a compact car, in Korea, though it indicated it planned to continue to produce the current model there as a lowercost strategic car for emerging markets.
It has not specified where it expects to make the new car, though Spain is rumored to be the choice.
Two individuals familiar with GM's product-development plans said the automaker had also shifted the Cruze's lead development team out of Korea to its technical centre near Detroit.
The company has similar plans for the Opel Mokka, a subcompact SUV it makes in South Korea and exports to Europe as the Mokka and to China and the United States as the Buick Encore.
GM said it planned to shift a large chunk of production of the car's redesigned model to Spain from the second half of 2014, initially using kits brought in from Korea.
GM Korea would keep producing its current model in South Korea. – Reuters
