General Motors stated its loss-making South Korean unit will file for bankruptcy if its union did not agree to cut labor costs by April 20, piling pressure on workers and the South Korean government to quickly agree a rescue plan.
The automaker stated in February it would close one of its four plants in South Korea, and asked for government support and union concessions to remain in South Korea.
Barry Engle, the President of GM International, further informed the union leader of GM Korea on Monday the unit required to secure $600 million in operating funds by the end of April, the union stated in a document reviewed by Reuters.
A GM Korea representative stated the union concessions were required for the automaker to present a confirmed turnaround plan to the government by April 20. The automaker wanted the union to reach a wage deal by the end of March, he stated.
If GM Korea could not present the plan by April 20 it would have no choice but to file for bankruptcy, the representative stated.
A government official, who discussed the matter on condition of anonymity, informed Reuters, that the automaker seemed to be “using threats to ramp up pressure on the union to make concessions by the end of March”.