GM Korea's CEO Kaher Kazim is calling on labour unions to reach a wage agreement by the end of March to help the company secure funding and put in place a recovery plan, according to local reports.
The automaker is facing bankruptcy after years of declining production and mounting losses and is looking for unions to immediately support its turnaround plan. The US parent company General Motors said it will agree to provide additional funds only once a wage agreement is reached with unions.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Wage negotiations have reached an impasse, however, with the automaker demanding a wage freeze and no bonuses to help it cut costs. Unions have said they will only agree to these terms if management agrees to reverse its decision to close the Gunsan assembly plant.
Kazem cranked up the pressure on unions this week by saying, in an email to employees, that it would be impossible to secure additional funding to cover April's operational costs unless a deal is agreed in principle with unions by the end of March.
In the email Kazem said that at least a tentative agreement with unions is needed by the end of March to ensure the company's sustainability and that "now is the time to act".
Previous to this, creditors led by the state-run Korea Development Bank had called for the two sides to reach an agreement by 20 April so that a recovery plan can be put in place.
See also: GM sets bankruptcy deadline for Korean unit
ANALYSIS – GM Korea's future in the balance
