GM Will Ask for Wage Freeze, Benefits Cuts at Korean Unit

General Motors Co. will propose freezing worker wages and suspending benefits for some employees to lower costs at its struggling manufacturing unit in South Korea, according to Reuters.

The news service cites an internal GM Korea letter that claims it will be “impossible” for the unit to pay worker bonuses, which average 10 million won ($9,300), in 2018. The letter adds that future wage hikes must be less than Korea’s inflation rate.

GM’s proposal also would suspend such benefits as school tuition, free lunches and travel expenses for senior employees. Sources tell Reuters GM has warned its workforce in Korea that it aims to lower annual benefit payments by 300 billion won ($279 million).

GM has loaned almost 3 trillion won ($2.8 billion) to its Korean unit, according to Reuters. It says the company has agreed to postpone a 700 billion-won ($651 million) payment on the debt that will come due at the end of next week. The suspension is pending a decision by the Korean government whether to step in with financial aid.