The
outlook for the court-managed Daewoo remains clouded by the persistent foot-dragging
of General Motors, the sole negotiating party for takeover, as well as a looming
labour dispute over the scope of layoffs, the Korea Herald said on Tuesday (5/12/00).
GM Korea president David Jerome was quoted as saying: "The acquisition
of Daewoo Motor is still part of GM’s global strategy. Announcement will be
made at an opportune moment later, depending on the progress of negotiations."
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One of his aides said that GM plans to make an official announcement on Daewoo
at the Detroit Motor Show early next year.
"GM president Rick Wagoner will hold a conference with the Korean press
at the Detroit Motor Show, due to open January 6, to unveil its takeover strategy
for Daewoo," the aide said, asking to remain anonymous.
"GM [remains willing] to buy Daewoo Motor. However, it is improper to
reveal the concrete takeover strategies now."
GM on Monday signed a joint research and development project with Seoul National
University and two other institutions.
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By GlobalDataIndustry analysts speculated that GM’s R&D projects are in line with its
efforts to cut the takeover price by shifting the focus of negotiations to technology
transfer and other qualitative factors.
"As the Seoul government is already hinting at split sales for Daewoo
at a steep discount, GM, taking advantage of its status as the sole bidder,
is expected to continue its foot-dragging strategy early next year," industry
analyst Rho Hyo-dong told the Korea Herald.
"In that sense, GM is likely to come to the negotiating table only after
Daewoo implements sweeping restructuring, including layoffs."
In the first round of bidding, won by Ford Motor, GM was reported to have offered
2 trillion won to 4 trillion won for Daewoo. It is now reportedly aiming to
buy Daewoo for less than 1 trillion won.
Apart from Daewoo’s dimming outlook, affiliate Ssangyong Motor’s independent
move to negotiate takeover with DaimlerChrysler will likely turn out to be turbulent
in the face of the German-U.S. automaker’s internal financial troubles, the
analysts told the newspaper.
As part of its stand-alone move, Ssangyong cut its marketing ties with Daewoo
Motor Sale last week, while its creditor Cho Hong Bank said that it will contact
DC after confirming GM’s stance on Ssangyong.
Meanwhile, Daewoo’s Pupyong plant produced 750 passenger cars, including 450
Lanos compacts, the first in some time, and plans to build out a total of 11,440
units this month.
