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GM president says 'shared sacrifice' needed to fix GM Korea

Reuters  |  DETROIT 

By Joseph White

(Reuters) - President said on Monday the automaker's troubled South Korean operations can be a "sustainable, profitable business," if unions and the agree quickly on a restructuring.

GM has warned Korean officials the unit faces a "cash crisis" in the first quarter without new funding. Nearly 2 trillion won ($1.88 billion) of GM Korea's debts to its parent are due by end-March or early April, according to a regulatory filing.

"Time is short and everybody must move with urgency," Ammann told in an interview when asked if March 31 was a deadline for action.

The state-funded said on Monday it had begun a due-diligence review of GM's South Korean unit as part of its decision whether to inject more capital into the money-losing operation.

GM officials have outlined plans to invest up to $2.8 billion in the South Korean operations and convert into equity about $2.7 billion in debt owed by the unit to the parent company, according to officials and a GM letter reviewed by

Ammann said that if the automaker, the and unions can agree on a restructuring plan "there's investment in the business, new product programs that we'd look to allocate" to

"It's a classical restructuring where everybody needs to contribute something in order for everybody to end up in a better place with a sustainable, profitable business."

New product investments would result in building vehicles that are part of GM's global product lineup and could be sold in other markets, Ammann said.

GM on Tuesday asked to designate its in the city of as a foreign investment zone to be eligible for corporate tax benefits, an at Incheon Metropolitan City told

The declined to elaborate further on GM's proposal.

To be eligible for the designation, manufacturers have to construct new factory facilities with foreign investment of more than $30 million, or invest more than $2 million in building or expanding research and development facilities.

(Reporting by IN DETROIT; Additional reporting by and in SEOUL; Editing by and Stephen Coates)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 11:41 IST