GM submits takeover proposal for Daewoo Motor
Wednesday, May 30th 2001, 12:00 am
By: News On 6
SEOUL, South Korea (AP) _ U.S. auto giant General Motors Corp. submitted a proposal Wednesday to take over South Korea's ailing Daewoo Motor, Daewoo's main creditor said.
The proposal sets the stage for negotiations on the sale of South Korea's third largest carmaker, which collapsed in the aftermath of the 1997-98 Asian currency crisis.
``The details of the GM proposal are confidential,'' said Yoon Jae-min, a spokesman at the state-run Korea Development Bank, Daewoo Motor's main creditor bank.
Takeover talks will start as early as this weekend.
Selling Daewoo Motor to foreign investors is seen as a test of the Seoul government's will to carry out corporate reforms needed to attract foreign investment.
For decades, labor groups have fiercely resisted the idea of selling key businesses to foreign investors. Daewoo's labor union, which staged violent protests in recent months, fears a takeover will lead to mass layoffs.
On Wednesday, about 200 laid-off Daewoo workers tried to topple steel container boxes that management placed around their labor office to block them reaching assembly lines at Daewoo's main plant in Bupyong, west of Seoul.
``Let's drive out GM! Let's drive out Americans!'' said a slogan spray-painted on the container boxes.
Company-hired security guards held the protesters back. No injuries were reported.
President Kim Dae-jung's government hopes GM's takeover of Daewoo Motor will invigorate the economy by prompting other foreign investors to enter the South Korean market.
Daewoo collapsed under an estimated debt of dlrs 15 billion and was put under court receivership in November.
Despite its heavy debts, Daewoo Motor can help foreign investors penetrate South Korea's closed auto market and serve as a stepping stone into China.
To sweeten a deal with GM, Daewoo Motor's court-appointed management laid off one-third of the company's 16,000 workers early this year.
GM entered negotiations to take over Daewoo Motor after Ford Motor Co. of the United States abruptly withdrew a bid in September.