GM Negotiating for China Engine Plant

DETROIT, June 11, 2003; Reuters reported that General Motors Corp. is still in negotiations to buy a Chinese engine plant which was set up by South Korea's Daewoo Motor Co., a senior GM executive said on Wednesday.

Fritz Henderson, president of GM's Asia-Pacific operations, denied recent reports that the talks had been called off.

"We're negotiating," Henderson told reporters at a briefing in Detroit. "There's a dance. We do have an interest in the plant."

Daewoo said in March that GM was set to buy the $228 million plant in Yantai in Shandong province, capable of producing 240,000 engines and transmissions a year, from its creditors.

Officials at the South Korean conglomerate had said talks hinged on a price for the Chinese engine venture, which GM said the ailing Asian auto maker wanted to sell.

GM and partners took a majority stake in some of the assets of Daewoo Motor last year, creating the new company GM Daewoo Automotive and Technology Co. Daewoo Motor is now in the process of liquidating assets not covered by the acquisition.