GM Korea getting ready to file for court receivership: Yonhap

Lim Chang-won Reporter Posted : 2018-04-13 15:36 Updated : 2018-04-13 15:36
글씨작게 글씨크게

[Yonhap News Photo]

SEOUL -- GM Korea Co., the South Korean unit of General Motors Co., has started making preparations to file for court receivership later this month as it is undergoing a cash crisis and the union's rejection of restructuring measures, industry sources said Friday.

"GM Korea is expected to apply for court protection around April 20 as it has warned. The carmaker looks set to gradually shut down its production facilities while only leaving the design, research and development, sales and services operations in Korea," a person familiar with the matter told Yonhap News Agency over the phone.

In recent months, the U.S. automaker has sought support from the Korean government and GM Korea's union in turning the loss-making Korean unit around. The Detroit-based company has stepped up its drive to reorganize its global operations through shutdowns and integrations.

But the union has refused to accept a drastic package of self-rescue measures offered by the U.S. parent company and the government has said a fresh capital injection will only be possible if GM has real intention to keep its local operations going by allotting new vehicles and making investments.

Last month, GM Executive Vice President Barry Engle called on the union to accept the company's revised wage offers that include a steep reduction in wages, bonuses and worker benefits. He warned that GM Korea could go bankrupt in mid-April if wage negotiations for this year fall through.