"The labor union has demonstrated its commitment and we continue to work with our other key stakeholders to gain their support", GM Korea CEO Kaher Kazem said in a statement, noting that ratification of the tentative agreement is "critical" to achieving additional support from shareholders and the Korean government.
Initially, the management offered to transfer 100 workers from its Gunsan plant to the company's other plants in Bupyeong District, Incheon, and Changwon, South Gyeongsang, while putting the rest on four-year leave without pay.
Korea workers accepted a wage freeze, no bonuses and the suspension of some work benefits.
The union will vote on the deal later this week.
Had they failed to strike a deal before 5 p.m. yesterday, the board of GM Korea was scheduled to hold a meeting that evening to discuss court receivership.
"The labor union made huge concessions to save the company", Hong Young-pyo, a lawmaker of the ruling Democratic Party who mediated the agreement, said at a news conference after the deal.
The deal would pave the way for Korea Development Bank (KDB) to provide support and for GM to allocate new models to South Korea to help turn around GM Korea, the unit said in a statement.
After talks with the union hit a snag, GM Korea had delayed the bankruptcy decision until today. The labor union shared part of the transcript from the final negotiations on its website where its union chief said that he will not forget how the company unilaterally pressured the workers to make concessions, warning that could be an obstacle in the company's path to recovery.
"This will influence further labor conflicts and activities case by case depending on how bad the situations are for companies or how the global economy goes". Among other things, she has pulled the company out of Europe, South Africa and Russian Federation. The unit lost 148 billion South Korean won previous year, or about $139 million.
The KDB, on the other hand, requested a 20-to-1 selective capital reduction to maintain its 17 percent share in the company, since the debt-to-equity swap proposed by GM would bring down the KDB's share in the company from 17 percent to 0.9 percent.
The company had originally set the deadline for an agreement from the union at midnight Friday, but it was delayed to 5 p.m. Monday after Finance Minister Kim Dong-yeon urged the two sides to find common ground through "swift but honest dialogue" and to avoid jeopardizing 150,000 local jobs at the carmaker and its subcontractors.
GM and SAIC Motor Corp. control 77 percent and six percent stake in the company, respectively.
GM restructured its Thai operations, and ceased production in Indonesia and Australia.
"The government and the KDB will determine the support measures [based on the long-term plan provided by GM]", the head of the financial regulator told reporters on Monday.
Some analysts said the fate of GM Korea is still uncertain.
"The initial findings have been forwarded to government policymakers for review and clearly show that the carmaker is more valuable if it stays open compared to it being liquidated", a market insider, who declined to be identified, said. It posted a net loss of $1.1 billion in 2017, its fourth straight year in the red. It is also an engineering and design source for GM's small vehicles and electric vehicles, as well as home to some of GM's top-ranked suppliers globally.