GM Korea and union to talk again on Friday, seek to stave off bankruptcy

SEOUL, April 20 (Reuters) – General Motors’ South Korean unit and its labor union are set to hold another round of wage talks on Friday afternoon, keen to stave off a threat by the U.S. automaker to seek bankruptcy for the loss-making unit.

GM, which in February announced its plan to shut down one of its plants in Korea, wants wage concessions from its labor union as well as government funding and incentives to save three other factories in the country.

The Detroit automaker has said the unit is likely to file for bankruptcy if there was no restructuring agreement by Friday. Marathon talks on Thursday failed to reach an agreement.

The two sides will hold another round of talks at 1 p.m. Korea time (0400 GMT), a union official said, adding that the most thorny issue is job security for 680 workers at the Gunsan factory that is due to be closed by May.

“We don’t want a disaster. We still have to keep in mind the worst situation,” he said, declining to be identified due to the sensitive nature of the talks.

“Today is an important day and we will concentrate our efforts on the negotiations.”

Any deal reached would be subject to a vote by union members in the coming days.

If they fail to reach a deal, GM Korea plans to hold a board meeting at around 8 p.m. to discuss a plan to file for bankruptcy protection for the operation, a source familiar with the matter said, also declining to be identified.

GM Korea is “committed to reach a tentative agreement with the labor union today to support the plan to make the company profitable and viable for the long-term,” said company spokesman Park Hae-ho. ($1 = 1,060.8700 won) (Reporting by Hyunjoo Jin; Editing by Edwina Gibbs)

Article Courtesy of CNBC