SEOUL, Aug 29 (Reuters) - South Korea's third-largest automaker, Daewoo Motor Co, is shut for a second day as a boycott by a major parts supplier is set to widen on Thursday to include others who are together owed $700 million in unpaid bills.
The dispute with suppliers comes as General Motors Corp prepares to launch a revived Daewoo under a joint venture later this year.
On Thursday, all of Daewoo's four plants in South Korea were closed, Daewoo spokesman Kim Sung-soo told Reuters.
"We are trying to end the dispute," Kim said. "We are in talks with creditors about shortening our payment period for suppliers."
Suppliers have demanded bills be paid within two weeks of deliveries versus the current four to five weeks.
A compromise on the issue would be offered to suppliers before they meet on Friday at 10:00 a.m. (0100 GMT) to decide their next move, Kim said.
A wider boycott looms as some 191 suppliers plan to discuss cutting off supplies in line with a move taken by top supplier Korea Delphi Automotive Systems on Wednesday.
FULL PAYMENT
Some $700 million in unpaid bills is the main problem to be resolved, an official at Daewoo's main lender, state-run Korea Development Bank, told Reuters.
Suppliers want full payment, while creditors that have spent over $2 billion to keep Daewoo afloat since 1999 want the companies to share the burden by reducing their claims.
"Parts suppliers want 850 billion won in arrears paid in cash," KDB official Yoo Hee-kyung told Reuters.
"Creditors want the suppliers to reduce that."
Korea Delphi, a joint venture between U.S. auto parts maker Delphi Corp and former Daewoo units, is owed more than 200 billion won, a company official told Reuters.
Shares in marketing unit Daewoo Motor Sales fell 2.3 percent to 8,600 won on Thursday, underperforming the Korea Composite Stock Price Index which rose 0.12 percent.
Daewoo estimated the plant closures meant lost output worth 15 billion won ($12.5 million) a day, or around 2,000 automobiles.
The Daewoo spokesman said it had enough vehicles in inventory to last up to three weeks though supplies of its Rezzo minivan, sold as the Tacuma in the U.S. market, had almost run out.