A bankruptcy deadline is rapidly approaching for GM Korea. On April 20, the unit will have no choice but to file for bankruptcy, and the South Korean government isn’t exactly ready to bail the business out.
Reuters reported on Sunday that the South Korean finance minister, Kim Dong-yeon, said GM Korea must be able to survive on its own in the future. Only then would the government provide public funds to support GM Korea.
He also urged General Motors and the auto union to reach an agreement on concessions and cuts. The minister added that each side needs to share the burden of restructuring the loss-making entity.
GM Korea has been a sour spot on GM’s balance sheet for years as high wages and declining exports have put the unit in a tough spot. GM shocked the South Korean government when it announced plans to shut down the Gunsan plant in May of this year. The future of GM Korea’s remaining facilities is in question still.