Don't panic, says Daewoo

AUSTRALIAN Daewoo car owners have been urged not to panic about the bankruptcy of Daewoo Motor Co. The Australian importer of the South Korean car brand, Daewoo Automotive Australia, has assured customers and dealers in a statement issued today that business will continue as normal. "It is important to note that Daewoo Automotive Australia is a 50/50 joint-venture between Daewoo Motor Co. Ltd and a partner, Starsurya International, and that Daewoo Motor's production facilities in Korea are operating," the statement said. "Stock of cars and spare parts is regularly being delivered to Australia and suppliers of Daewoo Automotive Australia are being paid as normal. No staff cuts or further re-structure are planned as a result of the current contingency. "Daewoo Automotive Australia intends to honour its commitment to warranty and Free Care as an integral part of its commercial operation in the years to come." Daewoo was declared bankrupt on Wednesday by its creditors after the car-maker's labour union rejected job cuts needed to ensure its sale to General Motors. It is reported the company has accrued as much as $US10 billion in debt, the result of rapid loans-fuelled international expansion in the 1990s. Daewoo Motor Co. has filed for court receivership, which should allow it to trade for at least the short term. It is expected that General Motors and Fiat will pick and choose the parts of Daewoo it wishes to buy. Daewoo Motor's creditors re-opened negotiations with GM and Fiat last month after Ford abruptly withdrew from exclusive talks in September. GM had said on Monday it was still conducting preliminary due diligence on Daewoo. "While negotiations have been protracted, both General Motors as well as Fiat have confirmed their interest in a stake of Daewoo Motor's operations," the Daewoo Automotive Australia statements aid. "Receivership has become necessary in the prolonged transition period between the re-structuring of the Korean conglomerate and the sale of its most valuable assets being undertaken to repay creditor banks. "We are informed from Seoul that most of the further cost cutting and restructuring is expected to affect the least profitable while preparing the company for sale. "Mr J. D. Lee, who successfully led KIA in its turnaround from insolvency in the recent past, has been appointed by the creditor banks as the new chairman of Daewoo Motors." The statement said the company's web site would be updated regularly regarding the situation. The address is www.daewooauto.com.au. Alternatively, Daewoo Automotive Australia's phone numbers are 1300 309 083 and (02) 9735 3500.