General Motors(GM) Korea and its labor union have failed to reach an agreement on wages. 

According to industry watchers, the two sides made little progress in wage negotiations, which lasted for over two hours from ten a.m. on Friday at the firm's headquarters in Bupyeong south of Seoul.

The union demanded the management to accept its wage demands and to withdraw the plan to shut down the Gunsan factory.

However, the company insisted the union accept a wage freeze and no bonuses as part of efforts to cut costs and help revive the firm, citing a serious credit crunch. 

In a letter sent to employees on Wednesday, GM Korea President and CEO Kaher Kazem said it will be impossible to secure additional funds to cover cost payments in April unless labor and management reach a wage agreement by the end of this month.