>Delivered-To: mailing list [EMAIL PROTECTED] >From: [EMAIL PROTECTED] > >Daewoo receivership seen reigniting labour showdown > >By Jason Neely > > >SEOUL, Nov 10 (Reuters) - South Korea's Daewoo Motor looked headed for >another showdown with its hardline union on Friday after filing for court >receivership, two days after becoming the biggest bankruptcy in Korean >history. > >"Normal operations became impossible after Wednesday's default," the >country's third-largest automaker said in a statement. > >The company, which has said it is losing 100 billion won ($88.49 million) a >month, was forced to close its largest plant on Thursday as suppliers balked >at delivering parts to a company with no money. > >Daewoo Motor defaulted on 87.50 billion won ($77.43 million) of maturing debt >on Wednesday. It owes more than $10 billion to a number of banks including >main creditor state-run Korea Development Bank. > >"I fully expect the banks will be asked to pump more money in," said Samsung >Securities auto analyst Mark Barclay. "But the banks will want concessions >from the union, which returns the process to where it was this week." > >Creditors who had run the company for over a year decided they would ask the >courts to take over the company after the 13,000-member union at the Daewoo >Motor rejected a demand for 3,500 job cuts and other concessions. > >Daewoo, whose name means 'great universe', is one of two Korean conglomerate >flagship companies to face financial ruin this week. > >The nation's largest builder, Hyundai Engineering and Construction, is >burdened with $4.5 billion in debt and must come up with a rescue plan or >choose either bankruptcy or a debt-to-equity swap. > >BANKRUPTCY RIPPLES GLOBALLY > >Daewoo's bankruptcy has rippled across its global businesses, with a major >Australian supplier reporting job cuts and Poland threatening to take over >the carmaker's Polish plants. > >Volkswagen is interested in buying Daewoo Motor's commercial vehicle plant in >Poland along with its 50 percent stake in U.K. van maker LDV, a Daewoo >official said on Friday. > >The future of Daewoo's joint venture in Uzbekistan looked uncertain as well. >Daewoo is that country's largest foreign investor. > >With an annual output capacity of 2.15 million units, Daewoo Motor has 12 >plants in 11 countries employing around 53,000. Its five domestic plans >including one Ssangyong Motor plant has 26,950 employees. > >In Korea, where the company has thousands of suppliers and subcontractors, >shares of some parts makers fell on Friday. Dongyang Mechatronics Corp, which >supplies various motors and oil-pressure cylinders to Daewoo Motor, closed >down 15 won to 4,895. > >Sam Lip Precision, an axle supplier to Daewoo Motor, closed up 1,350 won to >24,800 after falling earlier on Friday. Dongwon Metal Industries, a maker of >door frames and mufflers, eased 80 won to 3,510. > >Daewoo-related firms Daewoo Motor Sales shares ended down 30 won at 1,115 >while Ssangyong rose 10 won to 865. > >South Korean banks had spent almost $2 billion supporting the firm since >rescuing it and 11 other units of the Daewoo Group in August 1999. > >Their plan to save it from collapse and sell it took on new urgency in >September when Ford walked away from exclusive takeover talks after >submitting a nonbinding bid of 7.7 trillion won ($6.81 billion). > >Workers went unpaid as the banks stepped up pressure and went back to General >Motors and partner Fiat, which had made a smaller non-binding bid earlier, to >re-start negotiations. > >BANKS SEEN MOVING IN FAST > >Analysts expect the banks will move fast to keep operations, which had fallen >to about 60 percent capacity even before this week's bankruptcy, rolling. > >"Even if GM or some other buyer only wants to buy a plant or two, they will >need workers," Samsung's Barclay said. > >GM and Fiat have maintained a studied silence about their proposed takeover >of the Korean carmaker since the bankruptcy. > >Daewoo's main creditor bank Korea Development Bank said on Friday Daewoo >Motor's assets are expected to be sold this year. > >"We expect to settle this matter by the end of December," Kim Wang-kyung, >general manager of international finance at the > >Korea Development Bank, told Reuters on the sidelines of a meeting of >development banks in Bombay. > >He added that the ultimate bid price by GM-Fiat could be affected by the >bankruptcy and Ford's pullout. > >"The price could be less favourable due to all these developments," Kim said. > >Daewoo Motors is Korea's most high-profile victim of a 1997 financial crisis >that rocked companies across Asia. > >At stake are hundreds of thousands of jobs at Daewoo, related firms Daewoo >Motor Sales and Ssangyong Motor, and its thousands of suppliers. > >($1-1,130.0 won) > >03:47 11-10-00 > > >______________________________________________________________________ >To unsubscribe, write to [EMAIL PROTECTED] > >Want to effectively manage your Accounts Receivables? Need to >maximize cash flow? Now, you can with Freeworks' FREE ONLINE >ACCOUNTS RECEIVABLE MANAGER! Create invoices, track receivables, >review account statements and much more! > > >http://www.bcentral.com/listbot/Freeworks > > _______________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki - Finland +358-40-7177941, fax +358-9-7591081 e-mail [EMAIL PROTECTED] http://www.kominf.pp.fi _______________________________________________________ Kominform list for general information. Subscribe/unsubscribe messages to [EMAIL PROTECTED] Anti-Imperialism list for anti-imperialist news. Subscribe/unsubscribe messages: [EMAIL PROTECTED] [EMAIL PROTECTED] _______________________________________________________
