April 17, 2018 11:35
More and more dark clouds are gathering above the lossy branch of General Motors in South Korea. After the closure of one of the four factories in it continent seems to be the gate of the dam, because now there is even talk about one possibly bankruptcy. Is it still possible to save?
$ 600 million: so much is needed at the end of this month all compensate factory workers for their departure. More than 1,100 employees opted for a voluntary dismissal arrangement after the closure of a factory by GM Korea. A heavy burden for the company, which has been struggling with major losses for some time. The declining sales were the reason for the closure of the factory.
The closure seems to be the beginning of the end, because in the second month of this year the total sales of vehicles fell by 19 percent. Exports declined by 9 percent in February, while sales in South Korea were up by 48 percent respectively. Parent company GM has a large bailout plan of several billion, but the Americans only want to use it if the trade unions agree to certain cuts in the terms of employment. General also wants Motors to call in the help of the South Korean government. However, yesterday the minister of finance indicated that the Korean branch of the car company only gets help if the company can stand on its own feet in the long term. That reports Seeking Alpha.
Today, according to Reuters, however, a dot appears on the horizon. Major shareholder Korea Development Bank (KDB) has stated at the news agency that it will sign a preliminary deal on April 27 to pull GM Korea out of business. KDB owns 17 percent of the South Korean unit, making it the largest shareholder after GM (77 percent). KDB plans to provide more than $ 460 million in financial assistance to the company stop. With this, the major shareholder joins the promised 2.8 billion dollars from GM. Could the company be saved with nearly 16,000 employees? Time will have to learn.