Almost 2,500 General Motors Korea workers apply for voluntary redundancy package

Members of a civic group attend a protest demanding prosecutors in Gunsan to investigate General Motors Korea over its decision to shut down a plant in the city. (Yonhap via Reuters)
Updated 05 March 2018

Almost 2,500 General Motors Korea workers apply for voluntary redundancy package

SEOUL: Almost 2,500 workers at General Motors’ South Korean unit, equivalent to 15 percent of its staff, have applied for a redundancy package that the US automaker is offering as part of a drastic restructuring, union officials said.
GM shocked South Korea last month when it said it was closing down one plant and would decide on the fate of three others in the coming weeks — decisions that hang on potential financial support from Seoul and the amount of concessions it can gain from unions.
At the Gunsan factory which is due to be shut down, 941 out of some 2,000 workers applied for the redundancy package, the officials said, declining to be identified as the information has not been publicly released.
GM Korea declined to comment.
A GM document seen by Reuters showed that over the longer-term, the US automaker aims to cut 5,000 South Korean jobs but keep production steady if Seoul agrees to its $2.8 billion proposal for the loss-making operation.
Under the redundancy package, which had an application deadline of March 2, workers are being offered three times their annual base salary, money for college tuition and more than $9,000 toward a new car.
GM Korea plans to hold another round of talks with the union on Wednesday where the two sides may discuss the fate of the workers at the Gunsan plant who did not apply for the package as well as the automaker’s proposals on wages.
The union is under much pressure to make concessions. South Korea’s auto association added its voice on Friday, arguing that workers’ wages at GM were high.
“We should not miss the golden time for labor reform,” the Korea Automobile Manufacturers Association said in a statement.
The South Korean government is expected to start due diligence on GM Korea this week as it weighs whether to spend taxpayers’ money to rescue the unit.

Creditors take action against Al Jaber in decade-long saga

Updated 23 September 2020

Creditors take action against Al Jaber in decade-long saga

  • The downturn in the Gulf construction sector has triggered a number of corporate restructurings as companies are forced to reschedule debt, raise fresh borrowing or enter insolvency protection

DUBAI: Creditors have started to enforce claims against Abu Dhabi-based Al Jaber Group, in a dispute triggered by a construction downturn in the UAE more than a decade ago.

Al Jaber, a contractor with interests across a range of sectors, has struggled since building up debt in the wake of a UAE real estate crisis and began talks with creditors in 2011.

Abu Dhabi Commercial Bank, which is working as restructuring and security agent, said in a document dated Sept. 21 which was seen by Reuters, that it had instructions from the majority of creditors to proceed with claims against Al Jaber.

A representative for Al Jaber did not immediately respond to a request or comment. ADCB declined to comment.

The move follows delays in restructuring agreements, under which Al Jaber was to appoint a new board and sell companies and assets such as the Shangri-La hotels in Dubai and Abu Dhabi.

In exchange, creditors had agreed to extend the maturity of a 5.9 billion dirhams ($1.61 billion) loan, cut interest rates, and provide additional revolving debt.

The initial enforcement action now being pursued by creditors includes the “acceleration and demand for payment of amounts outstanding” under the previously agreed debt restructuring, a source familiar with the matter said.

Enforcement will also allow creditors to claim against Al Jaber’s chairman under a 4.5 billion dirham loan to the company.

Several UAE companies have sought to extend debt maturities or agree better terms in recent years to avoid defaults, after an oil price crash hit energy services and construction.

The coronavirus crisis has added to the strain and Arabtec Holding, the UAE’s biggest listed contractor, this week will discuss options including dissolution after the pandemic hit projects and led to additional costs.

Meanwhile, Dubai-listed construction firm Drake & Scull is working to reach an agreement with its creditors in an out-of-court process.