General Motors (NYSE: GM) has agreed to set up its Asia-Pacific headquarters in South Korea, in a further commitment by the U.S. automaker to its loss-making local unit, the government said on Thursday.
A preliminary agreement says GM will also buy more parts from South Korean suppliers for its overseas operations, boosting procurement from about two trillion won ($1.85 billion U.S.) a year at present, the industry ministry said in a statement.
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.
The statement did not give a figure for the level of support, but a ministry official said it would be worth tens of millions of dollars.
GM agreed last month to keep its local arm afloat after coming close to seeking bankruptcy protection. The firm won major concessions from its labor union on wages and benefits and secured a planned $750 million in funding from state-run Korea Development Bank.
The new regional headquarters will oversee production, sales and technology development for Asia Pacific countries, except for China, but including Australia, India and Thailand among others.
GM had previously operated its regional headquarters for "GM International" in Singapore, which covered South Korea, Australia, Southeast Asia, India, the Middle East and Africa.
GM shares gained 81 cents, or 2.2%, to $37.08
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