Daewoo Motor management holds emergency meeting

Minister of Finance Jin Nyum and Korea Development Bank (KDB) governor Uhm Rak-Yong warned Daewoo Motor that unless a landmark rehabilitation plan is formulated, the company could go bankrupt soon.

Minister Jin appeared on 'KBS Sunday Debate' and remarked that if the Daewoo Motor's management and labor union cannot come to an agreement on a viable rehabilitation plan, negotiations with GM, the only road to Daewoo¡¯s survival, will become very difficult. He added that during the last year, Daewoo Motor has shown weak efforts toward rehabilitation and unless a feasible plan is drawn up, the company will be sold off at a dirt-cheap price.

KDB governor Uhm revealed that Daewoo Motor has the ability to settle maturing debts with its own funds for only a few days. Unless Daewoo Motor's labor union submits an agreement on restructuring, the company has a high possibility of going insolvent early next week. The maturing notes from Nov. 6 to 15 total around 170 billion won.

Daewoo Motor Chairman Lee Jong-Dae and other members of management held an emergency meeting concerning the restructuring of the company at the Bupyong headquarters on Sunday. The management will make efforts to persuade the labor union to submit its acceptance for the restructuring plan, which was announced on Oct. 31, and other measures are being formulated.

However, the Daewoo Motor labor union has asserted that an agreement will be submitted only if there is a guarantee that the reduction of workers will save the company. If there is no real vision and only the sacrifice of workers is stressed, the labor union's position is that restructuring will be discussed only after unpaid wages are distributed.