GM Proposes $2.8 Billion, 10-Year Investment in South Korea

Moon Jae-in says General Motors factory shutdown will be a blow to regional economy

South Korea's trade minister Paik Un-gyu had said on Wednesday that the government has asked for an audit into General Motors "opaque" management in the country in the wake of the auto maker's decision to shut down a factory in a city southwest of Seoul.

The debt for equity swap would allow GM's business in South Korea to continue operating. The state-run Korea Development Bank owns a 17 percent stake in GM Korea. Watchers say KDB should have known about the automaker's financial predicament and sounded the alarm long before GM made its surprise announcement.

The U.S. automaker announced last week it would shut down a factory in Gunsan, southwest of Seoul, and that it was mulling the fate of its three remaining plants in South Korea.

South Korea's trade minister said the government has also asked for an audit into GM's "opaque" management in the country.

Lim said that the union is now focused on pressuring GM to put forward a turnaround plan in South Korea, as the company weighs its future in the country.

On Tuesday, Reuters reported GM had offered to convert debt of around $2.2 billion owed by its ailing South Korean operation into equity in exchange for financial support and tax benefits from Seoul, four sources with direct knowledge of the matter said.

GM has left markets deemed unprofitable in recent years, including markets in Europe and Russian Federation, according to Reuters.

Canada's Virtue/Moir win second Olympic gold in ice dance
Humphries of Calgary is trying to become the first bobsledder, male or female, to win Olympic gold three times in the same event. But we've known that ability around here for a long time - 20-plus years, really. "It's a really warm feeling".

"As we are at a critical juncture of needing to make product allocation decisions, the ongoing discussions must demonstrate significant progress by the end of February, when GM will make important decisions on next steps", he said.

Lim Han-taek, the head of GM Korea's union, told Reuters that workers would go on strike if the company decides to pull out of South Korea entirely.

Engle has asked for a meeting on Thursday with the trade minister, trade minister Paik told lawmakers.

Last week, the local carmaker's parent, General Motors Co., announced it will shut down its underutilized plant in Gunsan, one of the automobile giant's four vehicle assembly plants in South Korea.

Paik added that taxpayers' money would not be wasted in government efforts linked to the GM issue. The union leader said in an interview that he believed in the possibility of GM leaving the country. When GM left other markets, they did so boldly.

GM Korea posted a total of 1.9 trillion won in net losses between 2014 and 2016.

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