GM says Daewoo Motor part of its global strategy
GM says Daewoo Motor part of its global strategy
SEOUL (Reuters): General Motors sees bankrupt Daewoo Motor as
part of its global strategy and signed research pacts with South
Korean universities on Monday to underscore its commitment to the
local market.
GM and partner Fiat are in talks with Daewoo's creditors on
buying the firm, which sold over 945,000 vehicles last year and
has sprawling operations spanning 12 countries. The automaker
crumbled under an interest-bearing debt burden estimated at $7.45
billion at June 30.
"Daewoo Motor is a part of General Motors' global strategy and
the Korean market is very important to GM," David Jerome,
managing director of GM Korea, told a news conference.
Daewoo Motor could provide the world's largest automaker with
a stepping stone not only to South Korea's largely closed market,
but to other parts of Asia and Eastern Europe where the company's
plants are scattered.
Out of more than 900,000 vehicles sold in South Korea last
year, about 340,000 of them were made by Daewoo, compared to less
than 2,500 for every foreign maker combined.
GM on Monday signed pacts with several Korean universities to
launch joint research projects involving recyclable manufacturing
materials and electronic controls for chassis and emissions
systems.
"This sort of technological cooperation shows GM's perfect
commitment to Korea," he said. "We remain consistently interested
in Daewoo. And GM will be a good partner for Korea in the future
as in the past."
The two firms had a 15-year partnership that broke off in 1992
as the South Korean firm set out on an ambitious plan for
international expansion.
Jerome did not elaborate on how takeover talks involving GM,
partner Fiat and Daewoo's creditors were proceeding, citing a
confidentiality agreement.
But Daewoo Motor's chairman Lee Jong-dae told Reuters on
Saturday they were "steady and slow".
"I believe time is now on our side in negotiations with GM,"
Lee told Reuters. "I don't feel we should hurry up to conclude
the sale talks."
Daewoo Motor went bankrupt last month after creditors who had
rescued it and 11 other Daewoo Group firms in August 1999 cut off
funds.
The jolt shut down the company's largest plant and sent
suppliers scurrying, but the banks agreed to 727.9 billion won
($602.6 million) in fresh funding last week after the automaker's
union agreed to job cuts.
A key issue is bringing Daewoo Motor, which has models
including the Matiz minicar and Nubira and Lanos sedans, back to
profitability.
Daewoo posted a net loss of 1.42 trillion won on sales of 4.66
trillion won for the first nine months of the year.