Daewoo's U.S. Staff Cut in Half

USA Today reported that Daewoo edged closer to disappearing from North America on Wednesday when the U.S. arm of the South Korean automaker laid off more than half its workforce.

Daewoo Motor America officials said they had no choice but to let workers go because the unit hasn't gotten any money from its parent since September. Plus, U.S. dealers have refused to order new vehicles, which, in the past, had provided some cash flow.

The automaker is in negotiations to sell parts of its business to General Motors. But GM reportedly doesn't want the U.S. operations.

Between 60 and 70 Daewoo employees were indefinitely laid off, leaving the Compton, Calif., office with a staff of about 60, says Gary Connelly, vice president of sales and operations for Daewoo Motor America. "We don't have any money," Connelly says. "We haven't made any money in two weeks."

About 9,500 Daewoo cars are sitting at a California port because dealers aren't ordering more vehicles, and Daewoo Motor America can't afford to prep them and truck them to dealerships anyway, says Dan Myers, a Florida lawyer hired by Daewoo dealers.

The latest action has about 170,000 U.S. Daewoo owners frustrated. Connelly's advice: "Hang on. We have to wait until next week until the final agreement is signed to see if we will still be open for business." GM says it understands the Daewoo owners' concerns but that they should talk to Daewoo.