May 10 (UPI) — General Motors agreed Thursday to locate its Asia-Pacific headquarters in South Korea and purchase more parts from suppliers in the country.
Under a separate arrangement, the Seoul government and GM also agreed to a $7.15 billion bailout to keep the business running in South Korean. About $750 million of that will come from the country’s state-run Korea Development Bank.
South Korean Deputy Prime Minister and Finance Minister Kim Dong-yeon told reporters that GM will convert $2.8 billion owed by its Korean division into shares and extend $3.6 billion in loans to the division.
Kim said that under the terms, GM will be prevented from selling any of its stake in GM Korea for five years and from 2023-28, it must keep its holding in GM Korea above 35 percent. GM also is allocating two new vehicles to its Korean plants and is giving the KDB power to veto major management moves.
In February, GM announced plans to close its Gunsan factory due to faltering production levels. The plant directly employs some 2,000 workers out of its 16,000-member workforce in Korea.