Daewoo Could Begin To Resume Production Next Week

SEOUL, Sept 7 Reuters reported that bankrupt South Korean automaker Daewoo Motor is expected to resume production next week after the president of the main parts supplier that had been boycotting Daewoo resigned, the Chosun Ilbo reported on Saturday.

Production at the nation's third-largest automaker has been suspended since August 28 after main supplier Korea Delphi Automotive Systems halted part supplies to Daewoo, protesting delinquency of bills worth over $700 million.

Korea Delphi president Bae Gil-hoon tendered his resignation late on Friday, a Daewoo spokesman confirmed, potentially paving the way to an end of the boycott at Korea Delphi, which supplies 20 percent of Daewoo's parts.

The stalemate had fanned concerns a joint venture with General Motors could be knocked off track.

The Chosun report said U.S. firm Delphi Corp, a joint venture partner in Korea Delphi, was keen to avoid a dispute with GM, its former parent and largest customer.

Officials of Korea Delphi were not immediately available for comments.

Shares in marketing arm Daewoo Motor Sales Co, which trade as a proxy for Daewoo Motor, sank 4.2 percent to 8,450 on Friday, while the main index (KSE:^KS11 - News) fell 1.7 percent.

Korea Delphi initiated the boycott that included about 190 suppliers.

Delphi makes key auto parts, such as brake, steering and airconditioning systems.

GM, the world's largest carmaker, agreed in April to lead a $400 million investment for a controlling stake in Daewoo, after more than a year of talks.