Advertisement
YOU ARE HERE: LAT HomeCollections

GM Takeover Could Be End of Daewoo in U.S.

April 13, 2002|JOHN O'DELL | TIMES STAFF WRITER

General Motors Corp.'s expected takeover of Daewoo Motor Corp. would probably spell the end of the South Korean car maker's operations in the U.S., a top American Daewoo official said Friday.

The deal, expected to be signed this month, would strand Daewoo's 525 U.S. dealers, about 160,000 car owners and about 8,000 dealership and corporate employees.

Gary Connelly, senior U.S. executive for Compton-based Daewoo Motor America, said "there's every indication they are not including Daewoo Motor America in the deal. It doesn't look good."

GM has been negotiating for almost a year to acquire assets of the troubled South Korean car maker. The deal on the table calls for GM to take over assets that would help it gain a foothold in Korea and expand its Asia-Pacific presence.

Subsidiaries that don't advance those goals, including Daewoo Motor America, are not on the list of units to be acquired, Connelly said.

GM officials declined to comment, but have in the past questioned whether Daewoo had a place in the firm's U.S. strategy.

Daewoo's U.S. dealers have formed a committee to deal with the situation and this week retained Florida attorney Dan Myers to represent them, said Kirk Kelley, general manager of Daewoo of Cerritos. Myers also represents Oldsmobile dealers battling GM's decision to discontinue that brand.

"We have been misled for as long as these negotiations have been going on," Kelley said. "There's a Daewoo dealer in Utah who just celebrated the grand opening of his $4.5-million store."

Many Daewoo dealerships are part of larger operations, franchises paired with larger and better-known brands.

But a number are expensive stand-alone sites. Daewoo of Cerritos, part of a chain of dealerships owned by Bobby Colon, is one. Colon has three other Southern California Daewoo franchises that together employ 120 people. Most would lose their jobs if Daewoo Motor America folds, Kelley said.

Advertisement
Los Angeles Times Articles
|
|
|