Daewoo Incheon Motor Co., which makes cars for South Korea’s GM Daewoo Auto & Technology Co., started a two shift work system on Monday at one of its two production lines as demand for GM Daewoo vehicles grows, a GM Daewoo spokesman told Dow Jones Newswires.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Introduction of the two shift operation brings Daewoo Incheon, which relies entirely on orders from GM Daewoo, closer to meeting conditions laid out by General Motors Corp. before it can once again become part of GM Daewoo, an affiliate of the US car giant, the report noted.
Dow Jones said that Daewoo Incheon, which was formerly known as Daewoo Motor Co.’s Bupyeong plant, was separated from Daewoo Motor in late 2002 as GM excluded the plant from a deal to take over Daewoo Motor’s major assets, citing low productivity and frequent labour disputes at the plant.
However, the US car giant at the time agreed that it would buy Daewoo Incheon within six years of the original buyout of Daewoo Motor if Daewoo Incheon stabilises its management-labour relations and meets four conditions to improve its productivity during that period, the news agency added.
GM’s demand that Daewoo Incheon should operate on a two work shift system at both of the company’s two production lines was the most important condition and the most difficult to achieve, Daewoo Incheon told Dow Jones.
The company’s chief executive Kim Suk-hwan on Monday told the news agency that its other production line, which makes larger cars, is also expected to begin a two shift system by 2005.
“When GM Daewoo releases its luxury sedan in Korea, expected around 2005, and makes it at Daewoo Incheon’s facilities, the demand will likely lead to a dual system operation at Daewoo Incheon’s other production line,” CEO Kim reportedly said, adding: “That could be a time when GM Daewoo considers acquiring Daewoo Incheon.”
Dow Jones noted that GM Daewoo’s sales have increased sharply recently, particularly in the North American and Chinese markets, as GM sells GM Daewoo vehicles under GM group brands such as Chevrolet and Suzuki.
GM has said it will continue boosting exports of GM Daewoo vehicles by making use of its existing global marketing network, the report added.
