Campaign to turn Daewoo Motor 'people's firm'

Campaign to turn Daewoo Motor 'people's firm'

SEOUL (AFP): Former South Korean prime ministers and academics launched a campaign Tuesday to turn bankrupt Daewoo Motor Co. into a "people's company."

Ahead of the temporary closure of the carmaker's main plant, 300 prominent figures, including former government officials, college deans, and religious leaders vowed to transform Daewoo Motor into a company financed and run by citizens.

"We, all of us, are responsible for Daewoo Motor's problems. The company must be reborn as a competitive people's company," former vice prime minister Choi Gak-Kyu said in a statement.

Choi said the group would stage rallies from March 2 to the end of July aiming to raise one trillion won (US$794 million) in public donations.

The money would be used to buy Daewoo Motor shares, he said, expressing doubts about a government bid to sell the company to U.S. auto giant General Motors Corp. (GM) and its Italian partner Fiat SpA.

The Hankyoreh newspaper, a former dissident publication, has been run as a so-called "people's company" since 1988. But union leaders and experts have expressed skepticism about the possibilities of Daewoo Motor following the same route.

After Ford Motor Co. pulled out of a 6.9 billion dollar takeover bid last September, GM investigated Daewoo Motor's finances but has since made no further announcement.

Creditors contend GM is still interested in Daewoo Motor. But industry analysts have doubts.

The civic campaign came one day after Daewoo Motor announced it would close its main plant in the western city of Inchon for three weeks from next Monday due to slumping sales.

Daewoo officials said the closure was aimed at reducing costs and inventories. Sales in January fell 51.9 percent from a year earlier to 38,710 units, with inventory levels amounting to one month's orders.

Daewoo Motor was declared bankrupt three months ago. It plans to lay off 1,918 production workers starting February 16 as part of its efforts to slash 6,884 jobs, or a third of its workforce.

Its annual production capacity includes 1.06 million vehicles in South Korea and 875,000 in overseas plants in Poland, Romania, the Czech Republic, Uzbekistan, Ukraine, India, Iran, Libya, Vietnam, China and Egypt.

On Monday, Daewoo Motor's plant in Poland announced a plan to slash a quarter of its workforce or up to 1,300 jobs.

Creditor banks have pushed for drastic cost-cutting to accelerate the deal with GM. But unions have staged a wave of strikes to oppose job losses, insisting Daewoo Motor should be nationalized.

"We welcome the campaign. But our goal is to nationalize the company," union spokesman Choi Jong-Hak said.

He threatened to counter the planned plant closure with an all out strike.