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.