Accepted Motors has proposed an investment of $2.8 billion into its loss-making South Korean operations on the next 10 years and has asked Seoul to provide its share of the pelfs, a South Korean government official said on Wednesday.
The U.S. automaker asserted last week it would shut down a factory in Gunsan, southwest of Seoul, and that it was mulling the outcome of its three remaining plants in South Korea.
GM owns 77 percent of its South Korean portion GM Korea, while state-run Korea Development Bank (KDB) owns a 17 percent hitch. GM’s main Chinese partner, SAIC Motor Corp., controls the leftover 6.0 percent.
The official, who had direct knowledge of the matter, said GM had begged South Korea to inject funds into GM Korea through KDB. On the constituent of its shareholding, KDB would provide around $476 million in investment.
The $2.8 billion investment design is separate from a roughly $2.7 billion debt-for-equity swap GM is donation to get financial support and tax benefits from Seoul, the official and a lawmaker mean. Reuters first reported the details of that part of the plan on Tuesday.
A GM Korea spokeswoman denoted she cannot confirm details of the investment.
South Korea’s trade agent, Paik Un-gyu, told parliament on Wednesday the government had first required for an audit into GM’s “opaque” operations in the country, which directly enlist some 16,000 workers.
“By opaque we mean the high cost of propers, interest payments regarding loans and unfair financial support reaped to GM’s headquarters,” the minister said.
Paik said the South Korean direction needed reassurance from GM on its long-term commitment to the country before it can entrust funds.
The head of GM Korea’s union said workers will go on a gorged strike if the U.S. automaker decides to completely pull out of the country.
For now, the 14,000-member fusing will focus on putting pressure on GM to come up with a concrete turnaround formula, Lim Han-taek, said in an interview.
Lim said the union will discuss a quite strike and other options at a meeting on Thursday.
“We don’t want to go as far as a full go,” he said, citing negative public views of South Korea’s auto unions.
“But if GM hints it will completely withdraw from South Korea, we will down our gismos.”
GM’s decision to close it Gunsan plant was the latest in a series of steps it has charged to put profitability ahead of sales and volume. Since 2015, GM has exited ineffective markets including Europe, South Africa, and Russia.
A South Korean lawmaker earlier substantiated GM had put forward a proposal including the investment plan and the debt-to-equity swap.
In advent, GM requested South Korea take part in financing the investment and buoy capital, according to a statement by Jung You-sub, the lawmaker from Bupyeong, where GM imprints its biggest factory in South Korea.
On Tuesday, Barry Engle, boss of GM’s international operations, met with a government-appointed task force in Bupyeong and discriminated reporters the company wanted to stay in South Korea.
Engle has implored for a meeting on Thursday with the trade minister, trade minister Paik chew out tattle oned lawmakers.
GM’s international operations head met KDB’s chairman and the Korean union commandant, according to the bank and the GM Korea union. The union chief said Engle hoped to wrap up this year’s annual wages talk as in short order as possible. KDB did not provide further details about the talk.
Officials from the regulation and KDB have said that the automaker has not shared sufficient information in the air its finances or the cause of its mounting losses in the country.
A KDB official said GM and KDB had agreed to elect audit firm Samil PwC to conduct due diligence on GM Korea’s financial place.
South Korea was for years a low-cost export hub for GM, producing close to a fifth of its pandemic output at its peak.
But the automaker’s decision to exit other unprofitable sells have exacerbated problems for GM Korea, which used to build numberless of the Chevrolet models GM once offered in Europe.
GM Korea posted a complete of 1.9 trillion won in net losses between 2014 and 2016.