GM Shifts Global Strategy Away from China, Declares “Back to America” in Production and Sourcing

Dismantling Its China-Centric Supply Chain
Gradual Business Contraction in South Korea
North America-Focused Value Chain Realignment

General Motors (GM), one of the “Big Three” U.S. automakers, is rapidly restructuring its global strategy. The company has begun moving away from its China-based supply system while simultaneously scaling down its operations in South Korea through the closure and sale of direct-run service centers—a broader downsizing trend across Asia. At the same time, GM is increasing the share of its production in North America, signaling a decisive strategic shift toward stable domestic manufacturing and sourcing. As supply chains, market operations, and production systems align in the same direction, GM’s global priorities are becoming increasingly clear.

Roadmap to Zero Dependence on Chinese Parts

According to Reuters on November 12, GM has instructed its suppliers to gradually halt sourcing from China and shift materials and components for North American production to alternative regions. Some suppliers were reportedly given a deadline to end the use of Chinese-made parts completely by 2027. GM internally described this measure as part of its broader “resilience” strategy, emphasizing the goal of reducing reliance on China.

The move comes as a response to escalating U.S.–China trade tensions and growing supply chain instability. With Donald Trump’s return to the White House, tariff volatility between the two countries has intensified, while disruptions in critical supplies—such as rare earths and semiconductors—have become more frequent. China, once a core hub for automotive components like lighting systems, electronics, molds, and lithium materials, has tightened export controls on key minerals and electronics, heightening uncertainty. GM’s directive to eliminate Chinese inputs across product lines reflects the company’s conclusion that such risks are no longer sustainable.

GM had already taken steps to reduce dependency on Chinese materials in its battery and semiconductor operations—signing expanded contracts with U.S. rare earth suppliers and investing hundreds of millions of dollars in Nevada lithium mines to secure domestic resources. The latest guidance extends this diversification to more conventional parts such as chassis components, molds, and electrical systems. GM reaffirmed its principle of sourcing parts for North American-made vehicles domestically and has excluded sanctioned markets such as Russia and Venezuela from its supply chain.

Industry insiders, however, question the near-term feasibility of this plan, noting that China’s decades-old manufacturing ecosystem offers unmatched advantages in cost, delivery, and quality. “Suppliers are struggling to identify replacements,” said one executive. “Few countries can match the scale and quality Chinese firms provide.” Nonetheless, GM remains firm, citing accumulated risks and supply disruptions as justification for dismantling its China-centric network.

Restructuring Accelerates in South Korea: Service Centers Sold or Closed

GM is also shrinking its footprint across Asia and deepening its North American pivot. In South Korea, the company has begun shutting down its directly operated aftersales service centers in a move that mirrors its broader supply chain realignment. Korea GM announced that from January 1 next year, nine company-run centers nationwide will stop taking service requests, and operations will fully end on February 15. Facilities in Seoul, Busan, Changwon, and Gwangju are being sold, and roughly 450 employees will be reassigned internally. GM called this “an efficiency-driven measure,” stating that its 386 partner service centers will take over customer operations.

Over the past five years, Korea GM has liquidated assets including land and logistics hubs, recovering more than 310 million USD. The decision to close service centers has reignited speculation of a broader withdrawal, first raised after the closure of GM’s Gunsan plant in 2018. The company’s 2Q report showed that half of GM’s total global tariff burden—around 550 million USD of a total 1.1 billion USD—originated from its Korean operations, reinforcing analysis that tariffs were a central factor in the decision. As GM prioritizes profitability in its U.S. business, incentives to maintain production and service infrastructure in Korea have weakened.

The closures have also sparked labor unrest. The Korea GM labor union accused the company of unilaterally breaching prior agreements, arguing that closure timelines were finalized without consultation. GM countered that persistent deficits and tariff pressures made continued operation unsustainable. In most markets, direct-run service centers are seen as vital to maintaining local brand presence, but GM’s decision to scale them down underscores its determination to consolidate around a North America–first strategy.

EV and Global Manufacturing Framework Under Revision

Viewed globally, GM’s restructuring strategy is even clearer. The automaker is overhauling its electric vehicle (EV) production and supply systems to reinforce its “onshoring” approach in North America. Late last month, GM announced layoffs of 3,300 U.S. EV manufacturing workers, citing slowing demand, the expiration of federal tax credits, and shifting regulatory conditions. The company also revealed that its joint battery plants with LG Energy Solution in Ohio and Tennessee will suspend operations starting January 5, with plans to restart in mid-2026—a tactical slowdown aimed at managing cost and demand risks.

The restructuring extends to GM’s flagship EV assembly facility, Detroit D, where over 1,200 of 3,400 employees have been laid off indefinitely. The plant, which had produced core EV models such as the Silverado, Sierra, and Escalade IQ, will transition to a single-shift operation after December 24, shifting focus toward internal combustion trucks and SUVs. GM cited rising cost pressure as a key factor, noting in its third-quarter report that EV-related restructuring expenses alone reached 1.6 billion USD, with additional write-offs tied to the shutdown of its BrightDrop electric van operations in Canada.

The automaker’s adjustments are expanding beyond EVs to its entire global manufacturing footprint. In June, GM announced it would invest 4 billion USD over the next two years in three U.S. plants, raising annual output to more than two million vehicles. Production of models such as the Equinox and Blazer, previously manufactured in Mexico, will shift to plants in Kansas and Tennessee. CNN described this as part of “a trend toward U.S. investment expansion to mitigate tariff and subsidy risks,” noting that “tariffs, subsidy adjustments, and demand uncertainty have made North American production GM’s most stable option.”

The onshoring shift carries political implications as well, creating high-wage manufacturing jobs in the U.S. The United Auto Workers (UAW) union praised GM’s 4 billion USD plan as “proof that strategic automotive tariffs work.” From this perspective, GM’s moves represent more than geographic relocation—they mark a fundamental restructuring of its global value chain. With Chinese supply severed, Korean operations downsized, and both EV and combustion production pivoting toward North America, GM’s global strategy is clearly converging on one direction: a decisive retreat from Asia and a full return to the U.S. manufacturing base.