S. Korea signs free-trade deal with 5 Central American countries

Katrina Barker
February 22, 2018

A South Korean lawmaker earlier confirmed GM had put forward a proposal including the investment plan and the debt-to-equity swap. It was not immediately clear how the deal would affect the interest of the state-run Korea Development Bank, which owns 17 percent of GM Korea. Watchers say KDB should have known about the automaker's financial predicament and sounded the alarm long before GM made its surprise announcement.

General Motors (GM) has proposed a $2.8 billion fresh investment in South Korea over the next 10 years as part of its plan to restructure its embattled Korean unit, according to a South Korean senior government official. The company also said that it would decide about the fate of the remaining three South Korean plants within weeks.

South Korea and Russian Federation have agreed to beef up cooperation in the energy sector on a wide range of areas, including natural gas, electricity and renewable energy development, the Seoul government said Wednesday.

The GM executive is scheduled to meet officials of the state bank and South Korean policymakers in Seoul on Tuesday to seek financial assistance and cooperation to put its loss-making Korean unit back on track. Trade Minister Kim Hyun-chong signed the pact with economic ministers from Costa Rica, El Salvador, Honduras, Nicaragua and Panama, a spokeswoman for the Seoul ministry said, according to AFP.

"To secure an output volume of new vehicles that will keep GM's remaining plants in Korea operational, the company's union is required to accept a steep reduction in wages, bonuses and welfare benefits among other things", a GM Korea spokesman said over the phone.

Last week, the local carmaker's parent, General Motors Co., announced it will shut down its underutilized plant in Gunsan, one of the automobile giant's four auto assembly plants in South Korea.

Finance Minister Kim Dong-yeon told reporters on Tuesday that the government would "closely consult with GM to normalise its management", adding that a due diligence on the company should come first.

GM's worldwide operations head met KDB's chairman and the Korean union leader, according to the bank and the GM Korea union.

GM Korea posted a total of 1.9 trillion won ($1.8 billion) in net losses between 2014 and 2016.

Other reports by AllAboutTopnews

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