GM in Tense Standoff with Korean Labor Union
GM is locked in a tense standoff with its Korean labor union as an April 20 negotiating deadline set by the U.S. automaker approaches.
If the two sides fail to narrow differences over wages cuts and other cost-saving measures, GM Korea faces court receivership, which could cost more than 150,000 assembly line workers their jobs.
GM headquarters in Detroit has issued an ultimatum warning unionized workers that they have until this Friday to agree to cost-cutting measures or risk bankruptcy for GM Korea.
GM withdrew a request for a short-term loan to finance operations and told state-run Korea Development Bank, GM Korea’s second-largest shareholder, to show up for negotiations.
It is resisting demands for KDB to keep its 17-percent stake after the bank and the Korean government provide emergency cash infusions. GM wants the right to sell off the Korean unit's assets. If GM announces that talks have failed and allows GM Korea to go bankrupt, the Korean unit could be sold off in pieces.
GM is pressuring the union, KDB and the Korean government, because it wants as much funding as possible, but the government and KDB have trouble getting public approval for a bailout without a firm pledge from GM to keep the Korean unit operating in the years to come.