Watch GM and be afraid for S Korea's carmakers

Sydney

IT was not so long ago that South Korea's shipyards were keeping the world afloat. The slipways of Hyundai Heavy Industries Co, Daewoo Shipbuilding & Marine Engineering Co and Samsung Heavy Industries Co accounted for more than a third of the global market. Then competition from China increased, debt got out of control, and the entire industry was left holed below the waterline.

Something similar may be about to happen to the country's car industry.

Eyes are currently trained on General Motors Co's local…