After weeks of negotiating, GM Korea and its labor unions have reached a tentative deal. The deal, for now, will prevent General Motors South Korean division from filing for bankruptcy.
The automaker had previously imposed a deadline of Monday to reach a deal regarding wage concessions for about 2,600 GM Korea employees. In February GM Korea announced plans to close one of its four assembly plants in the country and began offering buyouts to most of its employee base.
In recent years GM Korea has struggled to maintain profitability. As such, the company is attempting to restructure by shedding about $600 million in costs. GM has said without concessions from the union and financial backing from the Korea Development Bank, GM Korea would likely be forced to file for bankruptcy protection in South Korea.
It is unclear if the Korea Development Bank has provided a financial plan for GM Korea. Nonetheless, Reuters reports the GM Korea board has decided to pause a vote to file for bankruptcy.