A deal has finally been struck between GM Korea and its labour union, staving off the need for the company having to file for bankruptcy protection, Reuters reports. The original April 20 deadline was extended until yesterday, when an agreement was finally reached.

According to the agreement, which was seen by the news agency, the union accepted the company’s request to freeze base wages and skip bonuses for the year as well as cut down on benefits, with any future base wage increases and performance pay to be dependent upon GM Korea regaining profitability. The tentative deal is still subject to a vote by union members later this week.

Barring any hiccups, the deal will open the path for nearly US$500 million in capital injection from the South Korean government, which will allow the company to pay employees and its suppliers. The deal will also see GM allocating two new models to South Korea to help turn around the fortunes of its South Korean operations.

Question marks about its longer-term future however remain – slumping vehicle sales and low factory run-rates brought about by GM’s decision to pull its Chevrolet brand from Europe, a key export market, means that the coast is far from clear for the company. It recently posted an annual net loss of US$1.1 billion in 2017, its fourth straight year in the red.

The company still produces more than a million assembled or partially-assembled vehicles for the United States and emerging markets, and is also the source of engineering and design for GM’s small vehicles and electric vehicles.

In February, the automaker had announced a major restructuring plan which involved shutting down one of its four South Korean factories by May and also the implementation of voluntary redundancy – some 2,600 employees out of the company’s total workforce of 26,000 have filed for voluntary retirement.