Feeling Mixed at Daewoo's Overseas Arms - Korean Viewpoint Of GM Buyout

Korean Tomes Kim Ki-tae Staff Reporter

Special To The Auto Channel

As General Motors dropped 12 of Daewoo's overseas branches from its shopping basket, out of the total 45, mixed reactions are being reported from Daewoo's worldwide subsidiaries.

Responding to news of the takeover, the U.S. car dealer group issued a statement saying the deal is sad news for American customers. Daewoo's sales arm in the U.S. was not included on GM's shopping list.

``Daewoo dealers in the U.S. have shown excellent performance in the market. With the U.S. branch omitted from the deal, GM has let a great opportunity slip through its fingers,'' said Walter Huizenga, chairman of the American International Automobile Dealers Association.

He said that GM is driving 525 dealers and their employees out of work, and if there are not responsible steps taken by the automaker to protect consumer rights, the association will take legal action.

Some representatives of the 525 dealers in the U.S. visited Seoul prior to the takeover agreement, and accused GM of intending to suffocate Daewoo's sales network in the U.S.

``The American carmaker has slaughtered two birds with one stone, by setting a foothold in South Korea for $400 million, as well as eliminating a competitor from the U.S. and global market,'' Al Gardiner, a representative from the Daewoo Dealer Advisory Council in the country last month.

According to a report by USA Today, the U.S. branch has already sacked more than half of its payroll and is on the verge of collapse.

General Motors yesterday that it would acquire only nine overseas sales bodies in Austria, the Benelux countries, France, Germany, Italy, Puerto Rico, Spain, Switzerland and European part supply operation based in the Netherlands, and only one overseas production plants, the one in Hanoi, Vietnam. Daewoo had 30 sales branches and 15 factories worldwide.

Daewoo Motor India is also reported to be disappointed as it was also left out of GM's final paper agreement, but has not ruled out hopes for inclusion in the takeover.

According to Indian daily The Economic Times, an official at the local branch hinted at his regret by saying that they will be consult on the future of the subsidiary.

The Daewoo's Indian branch expects additional negotiations, as the final agreement did not contain any specific mention of those excluded.

However, GM spokesperson Rob Leggat dismissed as "speculative" the suggestion that the current deal is open to further negotiations on the overseas units.

The Indian subsidiary has liability of 30 billion rupee ($600 million).

On the contrary, those listed in the final takeover agreement expect that the deal would boost their businesses operations.

A French economic daily Les Echos reported on Tuesday that Dawoo's sales branch in the country welcomed the conditions of the deal, calling it ``good news.''

The branch expects that the takeover will help it restore sales that have plunged over the last three years. It sold 5,835 cars last year, with its market share halving from the previous year.

GM chairman John Smith said on Tuesday that the company has been very careful in its selection, hinting that there won't be any additional takeovers.

kt-kim@koreatimes.co.kr