The clock is ticking on a restructuring deal for General Motors Korea, and GM President Dan Ammann has called on the South Korean government and union to partake in “shared sacrifice” for the businesses’ future.
He said GM Korea can absolutely be a sustainable business unit, but unions and the South Korean government must agree to a restructuring plan ahead of a “cash crises,” Reuters reported on Monday. According to a regulatory filing, GM Korea owes about $1.88 billion in debts by the end of March or early April.
Ammann didn’t confirm the debt timeline, but said, “Time is short and everybody must move with urgency.”
GM has already committed to invest $2.8 billion in South Korea if it reaches a restructuring deal with unions and the government, though it asked for co-investment from the state-run South Korean Development Bank. It also proposed a debt-to-equity swap.
However, any deal will likely still come with layoffs—5,000, to be exact, which would drop GM Korea’s staff from 16,000 to 11,000. The strings attached also include two new vehicles for South Korean production and a compact car’s engine.