GM Korea Threatens to File for Bankruptcy Next Month

General Motors Co.’s South Korean unit says it will file for bankruptcy by the end of April unless its union agrees to cut labor costs, Reuters reports.

GM Korea has warned the union that it needs to generate $600 million in operating funds by the end of April to pay its bills. The carmaker says it needs labor concessions by April 20, the day it hopes to present a turnaround plan to the Korean government.

The GM unit seeks financial aid from its 17% owner, the state-run Korea Development Bank. The carmaker’s U.S. parent holds a 77% stake. The remaining 6% is controlled by SAIC Motor Corp., GM’s partner in China.

The Korean company says that without union concessions, it will have no choice but to file for bankruptcy. GM announced last month that it intends to shut down one of its four factories in Korea in May. The company also aims to shed some 5,000 jobs, thereby reducing its workforce by 30%.

GM Korea warned two weeks ago that it faces a dire crash crunch next month because loans from its U.S. parent will come due. GM has vowed to add new products in Korea and stabilize production there, but only if government and labor join it in finding $2.8 billion to fund a turnaround.