US AUTO giant General Motors (GM) and Seoul have agreed on a multi-billion-dollar bailout for the firm's troubled South Korean unit, a government minister said on Thursday.
GM will have to hang on to its 77% stake in GM Korea for at least another five years, and that share can't fall below 35% until 2028.
The business has also restructured operations in India and South Africa.
GM's restructuring plans include a shutdown of one of its four plants in South Korea and reducing its workforce by almost 3,000.
"If GM Korea fails to turn around, 150,000 jobs will be threatened and some 3,000 suppliers will be in difficulties", he added.
Kim said the latest measures should ensure GM's long-term presence.
"We will assure GM contributes to the South Korean economy by running normal operations for the long term", he stated.
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The agreement reached between Seoul's finance minister and GM International President Barry Engle also calls for the Detroit-based automaker to convert $2.8 billion worth of debt into investment.
In return, South Korea will provide funding to local suppliers of GM and other South Korean automakers for the development of parts for electric and self-driving cars, and other key automotive parts.
It also plans to engineer and manufacture a small, fuel-efficient three-cylinder gasoline engine in Korea. But it has struggled in recent years as its cars lost popularity with Korean buyers and its exports and profit margins fell.
The restriction on the stake sale was one of tools that will prevent GM from leaving the South Korean market, Kim said.
"It was a very hard and a critical decision", chairman of the financial watchdog Financial Service Commission Choi Jong-ku said at the briefing, adding the government had to consider the risk to 156,000 jobs at GM Korea and its suppliers, the eco-system of South Korea's vehicle industry, as well as exports and local economies.