General Motors Co. warned that its South Korean unit would file for bankruptcy if its labor union will not agree to cost cuts by April 20, as the U.S. automaker seeks to turn around the struggling business, Reuters reported.
A spokesman for GM Korea reportedly said the business needs the concessions to present its restructuring plan to the government by April 20.
GM International President Barry Engle also reportedly told the leader of GM Korea's union on March 26 that the unit must secure $600 million in operating funds by the end of April, Reuters said, citing a document reviewed by the news agency.
The 13,000-member union on March 16 said it would accept GM's proposed base wage freeze and removal of bonuses if the company agrees not to close its Gunsan facility. Government-run Korea Development Bank, which holds 17% of the business, offered to provide short-term loans if the company would cooperate with due diligence.