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GM president says near resolution for S. Korea unit, union accepts wage deal

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General Motors (GM) Korea
REUTERS

SEOUL — General Motors Co.’s president said on Thursday that it was very close to a resolution to fix its ailing South Korean unit, as its South Korean union accepted a wage deal.

“Over the last few months, over the last few weeks a lot of very good progress has been made,” GM President Dan Ammann said in a meeting with South Korean ruling party lawmakers.

“We appreciate constructive efforts from all parties, and we stand here today very close to a resolution,” Ammann said.

On Monday, the Detroit car maker reached a preliminary deal with its South Korean labor union, winning concessions on pay and bonuses, allowing the money-losing operation to avoid filing for bankruptcy protection. Unionized workers at GM Korea approved a tentative wage deal agreed with the automaker, which includes a base salary freeze and no bonuses for this year.

The automaker is currently in talks with the South Korean government over an injection of public funds to support the unit.

GM and the state-run Korea Development Bank (KDB) are considering increasing the size of their investment from a previously proposed $2.8 billion, a senior government official said on Wednesday.

The US automaker owns 77% of GM Korea. KDB holds 17% and China’s SAIC Motor Corp. Ltd. controls the remaining 6%. — Reuters