Concerned about their future if the US Daewoo operation is excluded from GM#;s apparently imminent final deal, dealers have been lobbying GM executives this week.
According to Bloomberg News, neither GM nor Daewoo has told the Korean car maker#;s US dealers for certain if they’ll have vehicles to sell after a contract is signed, perhaps as early as this month.
“We’re not getting any information on how to deal with this,” Bloomberg was told by Rick Varley of Hermitage, Pennsylvania. He was one of four Daewoo dealers who met this week with General Motors dealer-relations executive Ron Sobrero and company attorney Michael Rovinsky.
“They tried to field questions, but every time it got to a sensitive nature they hid behind the confidentiality clause,” Varley told Bloomberg News.
Citing Mike Mahoney, general manager of field operations for Daewoo Motor America in Compton, California, Bloomberg said that if GM decided not to buy Daewoo#;s US unit, Daewoo cars would no longer be sold in the US and 525 dealerships would go out of business. The unit has 160 employees and Mahoney estimated that the dealers employ 6,000 people.
Daewoo’s U.S. sales fell 29 percent last year to 48,296 and have fallen a further three percent so far this year, Bloomberg News said.
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By GlobalData“We have it on pretty good authority that the deal they’re cooking up excludes Daewoo Motor America,” Mahoney told Bloomberg.
Bloomberg said that GM#;s Sobrero, in a letter dated April 4, told dealers they need to address their concerns to Daewoo in Korea “since GM has no contractual, fiduciary or other obligation to [Daewoo Motor America] or to U.S. Daewoo dealers.”
Bloomberg said that four US Daewoo dealers, along with Daewoo Motor America executive vice president of sales Gary Connelly, tried unsuccessfully to meet with Daewoo creditors and General Motors officials in Korea this week.
The news agency added that Sobrero’s letter said General Motors is entitled to make its own decisions about which assets to buy and the US dealers’ situation is a result of the bankruptcy of Daewoo Motor in Korea, not the fault of the US company.
“GM is getting the buy of a lifetime over there and is going to [hurt] a lot of people here,” Rallye Daewoo owner Marc Trieber of Monroe, New York, told Bloomberg News.
He added that Daewoo officials had earlier assured them any agreement would include the U.S. assets, Bloomberg said.