General Motors Co.’s South Korean unit dropped a plan to consider filing for bankruptcy after winning concessions on pay, bonuses and benefits from its labor union in a tentative deal reached today, Reuters reported. The deal will pave the way for nearly $500 million in fresh capital injection by the South Korean government, providing much-needed liquidity to GM Korea to pay employees and its suppliers, but slumping vehicle sales and low factory run-rates raise questions about its longer-term future. The concessions by GM Korea’s powerful auto union are expected to heap pressure on other auto unions for similar moves, at a time when South Korea’s auto industry is grappling with higher labor costs and sluggish demand from the United States and other markets.
