GM"s Ammann: "Shared sacrifice" needed to fix Korea unit

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DETROIT -- General Motors President Dan Ammann said on Monday the automaker"s troubled South Korean operations can be a "sustainable, profitable business," if unions and the South Korean government agree quickly on a restructuring.

GM has warned Korean officials the unit faces a "cash crisis" in the first quarter without new funding. Nearly 2 trillion won ($1.88 billion) of GM Korea"s debts to its parent are due by end-March or early April, according to a regulatory filing.

”Time is short and everybody must move with urgency,” Ammann told Reuters in an interview when asked if March 31 was a deadline for action.

The state-funded South Korean Development Bank said on Monday it had begun a due-diligence review of GM"s South Korean unit as part of its decision whether to inject more capital into the money-losing operation.

GM officials have outlined plans to invest up to $2.8 billion in the South Korean operations and convert into equity about $2.7 billion in debt owed by the unit to the parent company, according to Korean government officials and a GM letter reviewed by Reuters.

Ammann said that if the automaker, the South Korean government and unions can agree on a restructuring plan “there’s investment in the business, new product programs that we’d look to allocate" to South Korea. "It"s a classical restructuring where everybody needs to contribute something in order for everybody to end up in a better place with a sustainable, profitable business.”

New product investments would result in South Korea building vehicles that are part of GM"s global product lineup and could be sold in other markets, Ammann said.