Daewoo’s financial problems have now spilled over into job losses at the company’s highly respected UK technical centre. It is not clear how many jobs will actually go, but Daewoo is looking to consolidate its automotive Research and Development activities between its Worthing, UK, and Pupyong, Korea, bases.
Daewoo’s serious financial problems – the company owes $16 billion in debts – were caused by the collapse of demand and the financial crisis in Asia two years ago. The company was massively over-stretched financially at the time and has not recovered.
The automotive division is due to be sold to a foreign maker – most likely Ford or GM. Opposition to such a sale and industrial unrest has intensified in recent weeks. But the government is unlikely to be swayed. The sale of Daewoo is seen as an important test of its promise to open up the country’s restrictive market to foreign competition. Bids are in and a new owner will most likely be taking over at the end of the year.
The UK technical centre at Worthing in Sussex was acquired by Daewoo in 1994 (formerly it was an independent engineering consultancy – AID) and has played a key role in the development of new Daewoo models. It has seen substantial investment and is viewed as an important asset that would be attractive to a new owner – making complete closure very unlikely. Around 750 people are currently employed there.