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Daewoo U.S. Unit Slashes Work Force

April 30, 2002|From Bloomberg News

Daewoo Motor Co.'s U.S. sales arm fired about two-thirds of its workers, anticipating that the unit would be excluded from assets General Motors Corp. will acquire after the auto makers sealed their long-anticipated deal Monday.

About 105 of Daewoo Motor America's 165 employees were let go last week, said Gary Connelly, vice president of the Compton-based unit. The 60 remaining will keep their jobs until "the transition between Daewoo Korea and GM is finalized." Daewoo Motor America has closed all its field offices.

GM and other investors agreed Monday to buy some assets of Daewoo for $1.17 billion in cash and assumed debt, forming a new auto company and ending a four-year effort to salvage the insolvent South Korean auto maker.

The world's largest auto maker and unnamed business partners agreed to invest $400 million for a 67% stake in the new venture, said Nick Reilly, head of GM's Daewoo transition team. Daewoo's creditors, led by the Korea Development Bank, will invest $197 million cash for a 33% share.

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