South Korea's Daewoo Motor union opposes foreign sale

South Korea's Daewoo Motor union opposes foreign sale

SEOUL (Reuters): The labor union of South Korea's bankrupt Daewoo Motor said on Thursday it opposed a plan to sell the troubled automaker to a foreign company.

"The government and creditor banks should realize it's difficult to sell the company to a foreign buyer," the union said in a statement released ahead of a news conference at 0200 GMT.

"We urge them to cooperate with us to save it with our own efforts."

Daewoo Motor creditors are in talks with General Motors and its partner Fiat.

The union also demanded the company maintain the number of employees at the current level and offered to take leave on rotation.

"If such demands are met, we are ready to put up our salaries and severance payments for a debt-to-equity swap to save costs and for investment funds," it said.

It also asked prosecutors to investigate former Daewoo Group chairman Kim Woo-choong for alleged mismanagement of the automaker's operations at home and abroad.

Kim is thought to be traveling abroad.

The company said in late December it planned to lay off 6,884 workers, or 32 percent of its workforce, through restructuring.

The country's third largest automaker, whose court receivership application was approved in November, said it aimed to save 234 billion won (US$184.3 million) a year from job and wage cuts.

The company had said the job-cut plan would be discussed with the company's 13,000-member union, which represents 60 percent of its total workforce of 21,789 which includes temporary workers.

Daewoo Motor union abandoned its objections to any reform plan calling for job cuts after creditors initially refused to give fresh loans and the court threatened to liquidate the automaker unless the union accepted a layoff plan.

When the union dropped its objections, Daewoo Motor creditors decided early in December to provide 727.9 billion won ($573.4 million) in fresh loans by the first half of 2001 to help the sale of the automaker to GM and Fiat.

But progress on sale negotiations has been slow.

The company has said it is losing 100 billion won a month and reported a loss of 1.42 trillion won on sales of 4.66 trillion in the first nine months of this year. Its interest-bearing debt burden was estimated at $7.45 billion as of June 30.