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GM Korea told to restructure or risk going bankrupt

GM Korea told to restructure or risk going bankrupt

SEOUL:  However, on April 12, a key negotiating session between GM Korea and the KMWU was canceled when KMWU officials refused to conduct the meeting under CCTV monitoring. Since then, no new talks have been scheduled.

Meanwhile, Korea Development Bank chairman, Lee Dong-gull said a due diligence to determine whether it is feasible to provide GM Korea with interim and new financing will be completed by the end of April. Lee holds a 17% stake in GM Korea.

Korea’s Minister of Trade, Industry and Energy, Paik Un-gyu, said his agency is expediting a review of GM Korea’s application to have some of its factories designated as foreign investment zones. This will provide the company a five-year tax-free status for new investments, followed by additional 50% tax reductions in subsequent years.

Major shareholders and other parties involved need to swiftly come to an agreement on sharing the burden of improving the loss-making operation,” read the report. GM is currently seeking government funding and incentives on top of wage concessions to save its Korean subsidiary, which just posted an annual net loss of US$1.1 billion (RM4.28 billion), its fourth straight year in the red.