General Motors laid out a stark reality for the South Korean labor union on Monday: bankruptcy is fast approaching. The automaker’s South Korean unit needs $600 million in new funds to make payments due on April 20. The union has until then to make concessions, The Financial Times reported.
The $600 million needed includes funds for subcontractors and money for GM Korea workers who chose the buyout package earlier this year. The package includes three times a worker’s salary, money for a child’s college tuition and funds towards the purchase of a new car.
It all comes as the Korean Development Bank continues to conduct its due diligence and make a final decision on whether it will provide new funds for GM Korea; the KDB owns a 17-percent stake in the operation. GM itself has also asked South Korea to co-invest in the proposed $2.8 billion investment plan, which would fuel GM Korea for 10 years. In the process, GM would slash 5,000 South Korean jobs, but bring new vehicle and engine production to the country’s remaining plants.
The Gunsan plant will close its doors by May and GM said it has yet to make a decision on the three remaining plants in the country.
Comments
Poor South Korea…Economically collapsing and GM Korea going with it.
What happened to that dream Korean economy that was so over-hyped? What happened to the “deal right around the corner” for South Korea and GM? Best part is South Korea has got to start trading fairly with the U.S. now. Those that pretend to be big boys have to put on the big boy pants.
Have you watched the Olympics? Most cities in South Korea make the US look like a shithole. South Korea is doing fine but GM SK isn’t. GM Bankruptcy talks again…
Have you watched the Olympics? Most cities in South Korea make the US look like a s*@$hole. South Korea is doing fine but GM SK isn’t. GM Bankruptcy talks again…
The Korean government has said it won’t offer a cent until the US government signs the free trade deal. Trump has just said he’s going to delay it again – goodbye GM.
Thailand, which supplies the Colorado to Korea, will be become unviable as well, so goodbye GMH.
Cutting our way to growth !
Perhaps they shouldn’t have wasted all that money trying to make the world think they were rich during the Olympics.
Have you looked at your 21.5 trillion $ deficit lately? Hyundai/Kia dwarfs Ford and GM in market capitalization.
Absolutely flawless Olympics compared to the redneck fiasco of Atlanta and Salt Lake City. I should know as I was there.
There not tell the truth in south korea.
South Korea’s people will not give American products much of chance as they view GM cars as being outsiders despite they’re built in South Korea, it’s best to end this experiment and not throw more money in hopes the Korean people will change their mind.
this have something to do whit trump policies,,,,
Why not redesign the Orlando on the D2xx and export it to America North and South and to global market, and GM should re enter Europe.
rebirth of Daewoo and push Chevrolet at VW standard and Daewoo as kind of low cost.
South Koreans are extremely nationalistic and won’t support foreign brands. And they are highly successful in selling their products around the world. Kia, Hyundai, Genesis, LG, Samsung… All very competitive brands which are very successful around the world. Not bad for a country of 51 million people. They are very proud of their country and work their asses off.
If GM would have gotten rid of the GM Korea, they would have kept Opel and invested their 2,8 billion dollars in Europe. It would have been a “better idea”, as Ford said!
Again, someone explain to me how GM is doing so bad when they sell a lot of cars in Korea? I used to regularly watch auto sales charts around the world. GM kills it in South America too, yet is going broke there????? Why does every other mfg seem to make a profit in these markets, but GM being in the top 3 autos in say, Brazil is losing money?
Can you explain how GM was selling so many cars pre-bankruptcy, yet was losing so much money? And why Toyota, at that time, was selling fewer cars while making a boatload of money? If you answer this, it may give you a good hint at the answer you seek.