Seoul — General Motors’ (GM’s) South Korean unit dropped a plan to consider filing for bankruptcy after winning concessions on pay, bonuses and benefits from its labour union in a tentative deal reached on Monday. The deal will pave the way for nearly $500m in fresh capital injection by the South Korean government, providing much-needed liquidity to GM Korea to pay employees and its suppliers, but slumping vehicle sales and low factory run rates raise questions about its future. The concessions by GM Korea’s union are expected to heap pressure on other automotive unions for similar moves, at a time when South Korea’s vehicle industry is grappling with higher labour costs and sluggish demand. "Through the latest agreement, GM Korea will be a competitive manufacturing company," Kaher Kazem, CE of GM Korea, said. GM shocked South Korea in February when it unveiled a major restructuring plan for the money-losing unit, which involved shuttering one of its four plants in the country and v...
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