SEOUL – In another strange turn of events, some 7,000 employees of Daewoo Motor Co. Ltd.’s Bupyeong (formerly known as Pupyong) vehicle manufacturing complex are planning a massive public rally Wednesday, June 13, in the city of Pupyong to demonstrate in favor of aCorp. takeover of the insolvent automaker.
Discussions over the last year regarding GM’s purchase of Daewoo have been marked by violent labor demonstrations protesting a foreign takeover of their company.
GM officials reportedly are delighted with the news of the favorable rally, but a source tells Ward’s Automotive International that others see it "as a two-edged sword." The support comes with a price; the workers also want GM to take over the Bupyeong plants so they can keep their jobs. Those familiar with the negotiations have said GM does not plan to purchase the large and outdated complex.
Nonetheless, it's still a victory for GM, analysts say. It means the employees favor GM and are against any kind of nationalization scheme. The demonstrators will include middle and upper managers from Daewoo Motor's world headquarters, which is located within the industrial complex, indicating that Daewoo's professional and managerial people favor a quick resumption of the stalled negotiations.
Sources say they are pressing their own leaders and Daewoo creditors, to get back to the negotiating table with Daewoo and its main creditor, the Korean Development Bank (KDB), and work something out with GM. The various factions until this week had been meeting in Hong Kong to hammer out a formal Memorandum of Understanding.
In addition to housing two assembly plants and supporting press shop, paint shop and welding shop facilities, the Bupyeong complex also holds the Daewoo Technical Center and Daewoo's world headquarters facility. The 7,000 employees include 4,500 blue-collar workers and 2,500 white-collar employees. The Daewoo Building in downtown Seoul houses the sales department, public relations staff and part of the finance department.
A GM insider says that the break in negotiations is disappointing, but that very little progress was being made during the just ended weeklong session. "We seem to be more interested in quickly resolving this than they are," the insider says. The area of contention appears to be the amount of cash GM is willing to pay for Daewoo assets, which insiders previously have said is $1 billion or less. The KBD reportedly is demanding between $2 million and $3 million.
The government-controlled KDB, which represents all Daewoo creditors, is telling local news media that the breakdown is not terribly significant. It was the KDB governor who told the Daewoo negotiating team to leave Hong Kong and return to Seoul. There appears to be no immediate plan for a return to the negotiating table. Alan Perriton, who leads the GM negotiating team, now is in Seoul and making a few courtesy calls, but there seems little else to do until KDB beckons once again.
Told of the rift, Korean security analysts are staggered. One angrily asserted that if GM cannot satisfy KDB's price requirements, then GM must want to dump the deal. GM sources vehemently deny this. They say that they want to acquire Daewoo assets badly and quickly, adding that every day that goes by reduces the company's worth and increases the investment GM will have to make to restore Daewoo as a viable automaker. o