In the week riot police dislodged hundreds of striking workers at a Daewoo Motor plant in Inchon, questions remain about whether General Motors will still come to the rescue, the New York Times (NYT) said in a special report from South Korea.

The newspaper quoted Shin Kook Hwan, the minister of commerce, industry and energy, as saying: "We will jump-start the talks with GM" as soon as possible "since the obstacles have been removed."

The primary obstacle, he said, had been the resistance of workers to layoffs that General Motors negotiators had made clear had to happen before they could consider renewing an offer that they first made in 1999 as Daewoo Motor collapsed under more than $US10 billion in debts, the NYT said.

The speed with which the police on Monday overpowered several hundred workers who had seized the plant and vowed to hold it until the company backed down on the layoffs was seen as evidence of the South Korean government's determination to break the power of the union, the newspaper said.

Government and company officials left no doubt of the importance they attach to General Motors in the plan for Daewoo Motor's survival. "Our first hope is to sell it to GM," Mr. Shin told the NYT.

In interviews with the newspaper, General Motors executives declined to comment on whether they will make an offer for the company. The overriding question, people close to the company told the NYT, was the value of Daewoo Motor, for which GM had reportedly been willing in early 1999 to offer $US6 billion if the creditors had agreed to sell it then.

The longer the process of selling the company has gone on, however, the value of the company has slipped. The price is now estimated to be no more than $US2 billion to $US3 billion, the NYT said.

Nonetheless, a General Motors official told the newspaper that he was heartened that South Korean officials had spoken so openly about their need for GM.

"They've never given us any sign of favouritism before," said the official, who asked that the NYT not use his name. "In the past they've always said, 'If we don't have GM, we'll have someone else.' Today they said something positive. That's a change in direction."

The NYT reported that there are concerns that General Motors could do what Ford did in September and walk away from making a bid.

General Motors owned 50 percent of Daewoo until 1992, when it sold its stake to Kim Woo Choong, the founder of the Daewoo conglomerate.

The company had used Daewoo as a source of cheap Japanese import-fighting cars, licensing Daewoo to produce the mid-1980s European Opel Astra model both for sale in Korea and (badged as the Pontiac Le Mans) for export to the U.S. and New Zealand.

According to the NYT, GM negotiators, fearful of losing badly nine years ago, have been wary about returning to a company that they may discover has lost even more than already disclosed in areas like quality control, research and development and sales and marketing.

The newspaper noted that Ford, having been selected as "sole bidder," decided the company's books were in such disarray that it had to withdraw its $US6.9 billion offer in September.

Still, the NYT concluded, there are few alternatives. No one in authority in South Korea likes the idea of nationalising Daewoo, a step that would be almost certain to leave it a perpetual money-loser at the taxpayers' expense.

"Making Daewoo a public or national corporation will take a long time," Lee Jong Dae, the chief executive appointed by the creditors who took over Daewoo Motor in 1999, told the NYT. " I don't think creditors would wait."

Mr. Shin, the commerce minister, acknowledged that the problem of what to do with Daewoo if GM decided not to buy it would "become more complex." Still, he added, "We expect it will be possible to normalize the management or sell to a domestic company."

He did not tell the NYT what "domestic company," he had in mind but, the newspaper said, the reference was clear. The buyer would be the Hyundai Motor Company, a move that would leave South Korea with only one major manufacturer.

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