GM offers $2.8 bn investment in South Korea over 10 years

GM offers $2.8 bn investment in South Korea over 10 years

GM offers $2.8 bn investment in South Korea over 10 years

South Korea said on Wednesday it is signing free trade agreements with five Central American nations aimed at boosting market access for the Korean auto sector and electronics makers.

Motors has offered a $2.8-billion investment to South Korea over the next 10 years in a move to restructure its problematic Korean unit, according to a senior government official in South Korea.

"By opaque we mean the high rate of profits to raw material costs, interest payments regarding loans and unfair financial support made to GM's headquarters", Paik told lawmakers in parliament.

The head of GM Korea's union said workers will go on a full strike if the USA automaker decides to completely pull out of the country.

A week ago, GM announced plans to close its underutilized Gunsan plant, one of four assembly lines in Korea, and it strongly hinted that it was considering pulling out of the country entirely if it couldn't reverse deep, ongoing losses.

For now, the 14,000-member union will focus on putting pressure on GM to come up with a concrete turnaround plan, Lim Han-taek, said in an interview.

"We are ready to discuss the normalization of GM Korea", Finance Minister Kim Dong-yeon said in a meeting with reporters. GM wants to keep the remaining three plants - two in Bupyeong, just west of the capital city, and one in Changwon in the country's southeast - by allocating a new crossover vehicle for production here, the spokesman said.

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GM's decision to close it Gunsan plant was the latest in a series of steps it has made to put profitability and innovation ahead of sales and volume.

He said that there are several preconditions for providing financial support for the automaker, adding GM should present its commitment to improving management in the long-term.

The US trade deficit - which Trump has vowed repeatedly to fix - widened even further during his first year in office, up 12 per cent to $566 billion.

GM owns 77 percent of its South Korean unit GM Korea, while state-run Korea Development Bank (KDB) owns a 17 percent stake. When GM left other markets, they did so boldly.

In the case of South Korea, it announced it would consider appealing to the WTO if the US decides to impose tariffs on steel, according to a Nikkei Asian Review report.

A South Korean lawmaker said earlier that GM had put forward a proposal including the investment plan and a debt to equity swap of the Korea unit's borrowings to the parent company.

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