GM Wants More Funds; Gov't says Fresh Investment Plans are First

Write : 2018-02-14 15:51:27 Update : 2018-02-16 10:34:38

GM Wants More Funds; Gov't says Fresh Investment Plans are First

Anchor: The South Korean industry minister says that the government will decide on whether to provide financial support for General Motors Korea after reviewing the automaker's plans on fresh investment and restructuring. Meanwhile, workers have begun discussing a strike. 
Kim In-kyung has more. 

Report: General Motors(GM) wants more funds from the South Korean government, the government says GM should offer fresh investment and normalization plans and workers are mulling a general strike. 

Industry Minister Paik Un-gyu told reporters Tuesday that he cannot make any commitment regarding a support plan as the automaker has not presented specific plans on new investment or restructuring. 

After years of remaining ambiguous about its intentions, GM announced Tuesday that it would close one of its four factories in South Korea by May, saying that it had been working at 20 percent of its capacity for the past three years. The closure is expected to lead to a loss of two-thousand jobs at the Gunsan factory and affect another ten-thousand workers at subcontractors.  

Questions that General Motors may pull out from the South Korean market surfaced four years ago. 

GM Korea had been a major supplier of Chevrolet cars to Europe, but its finances were strained after GM decided to discontinue the brand in that market in 2013. The South Korean subsidiary is estimated to have incurred a net loss of up to three trillion won during the past four years. 

The company's exports of fully built cars fell ten percent in 2016 from the previous year and another six percent last year. However, wages at the business continued to rise. Personnel expenses in 2015 jumped more than 50 percent from 2010. 

GM President Dan Amman said the company's stay in South Korea in the long term will depend on the provision of funds or other incentives from the South Korean government as well as an agreement from workers to cut labor costs.  

Workers, on the other hand, say GM Korea has been paying excessively for parts and paying exorbitant interest rates for loans that it made from its mother company. 

The Gunsan branch of the Korean Metal Workers' Union held discussions on Wednesday and agreed to demand the normalization of the plant by allocating new vehicles, a cancellation of the closure and the resignation of management, including the chief of GM Korea. If the demands are rejected, it will introduce a motion on a strike.  
Kim In-kyung, KBS World Radio News.

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