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GM Korea Bailout Talks Stall Over Labor Cuts
GM Korea and its unionized workers failed to reach agreement on Thursday about concessions, making a bankruptcy filing on Friday more likely.
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GM Korea and its unionized workers failed to reach agreement on Thursday about concessions, making it more likely the company will follow through with its threat to file for bankruptcy on Friday.
GM Korea says the two sides have “not been able to narrow differences” about how to reduce production costs and relocate workers at the factory GM plans to close in Gunsan in May. The company says no talks have been scheduled for Friday.
A source tells Reuters that GM Korea’s board plans to hold a meeting Friday night to discuss a bankruptcy filing. The source notes that a bailout is still possible even if the filing takes place.
The Korea Development Bank, which owns 17% of GM Korea, said earlier this week it might agree by April 27 to provide some 500 billion won ($469 million) in aid. GM has pledged to invest $2.8 billion to revive the Korean business, but only if KDB and labor unions contribute.
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