April 26, 2018 / 2:58 AM / a year ago

GM president says near resolution for South Korea unit, union accepts wage deal

General Motors President Dan Ammann speaks during GM's press conference at the North American International Auto Show in Detroit, Michigan, U.S., January 16, 2018. REUTERS/Rebecca Cook/Files

SEOUL (Reuters) - General Motors Co’s president said on Thursday that it was very close to a resolution to fix its ailing South Korean unit, as its South Korean union accepted a wage deal.

“Over the last few months, over the last few weeks a lot of very good progress has been made,” GM President Dan Ammann said in a meeting with South Korean ruling party lawmakers.

“We appreciate constructive efforts from all parties, and we stand here today very close to a resolution,” Ammann said.

On Monday, the Detroit carmaker reached a preliminary deal with its South Korean labour union, winning concessions on pay and bonuses, allowing the the money-losing operation to avoid filing for bankruptcy protection.

Unionized workers at GM Korea approved a tentative wage deal agreed with the automaker, which includes a base salary freeze and no bonuses for this year.

The automaker is currently in talks with the South Korean government over an injection of public funds to support the unit.

GM and the state-run Korea Development Bank (KDB) are considering increasing the size of their investment from a previously proposed $2.8 billion, a senior government official said on Wednesday.

The U.S. automaker owns 77 percent of GM Korea. KDB holds 17 percent and China’s SAIC Motor Corp Ltd controls the remaining 6 percent.

Reporting by Jane Chung and Hyunjoo Jin; Writing by Ju-min Park; Editing by Edwina Gibbs

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