The American International Automobile Dealers Association (AIADA) has described yesterday’s General Motors announcement that it will acquire key Daewoo Motor assets as “a sad day for consumers in America and the franchise system” and said “litigation is almost a certainty”.
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“Daewoo dealers have demonstrated a unique ability to successfully retail automobiles under the most extreme market conditions,” AIADA president Walter Huizenga said.
“Unless something is done to protect the consumers and the dealers, protracted litigation is almost a certainty. Both GM and Daewoo Motor need to address the significant and serious needs of these dealers in order to provide an orderly and fair transition,” he added.
Under terms of the deal, GM and its yet-unidentified GM partners will pay $400 million for 67 percent of a new company that will be formed to take over specified Daewoo Motor assets. Daewoo’s U.S. dealer network is not included in the deal.
“GM is missing a wonderful opportunity in this market, and has left 525 US dealers and their employees out in the cold,” Huizenga said.
In an effort to avert the threat to US Daewoo dealers, AIADA had previously contacted senior GM executives, urging them to keep the network intact.
Executives from the import brand dealers’ association also made a special trip to Seoul to lobby Korean government officials, including the president’s office and the ministry of finance and economy.
