Daewoo bankruptcy threatens GM plans
SEOUL - Daewoo Motor Co. Ltd.'s creditors declare the automaker bankrupt after union leaders refuse to agree to 3,500 job cuts, part of a comprehensive restructuring plan. The decision on the part of the creditors - a decision made when Daewoo defaulted on loans totaling 87.5 billion won ($77 million) - places the automaker under court receivership. Receivership freezes debt and reportedly results in new management. Daewoo as a result of the bankruptcy has suspended production at Pupyong, its main plant, which has annual production capacity of 500,000 vehicles. Many Pupyong employees believe it to be the beginning of a permanent shutdown.Corp.'s Australian unit, Holden Ltd., which supplies engines to Daewoo, also has closed its engine plant for 10 days and estimates more than 300 of the 2,000 workers there will lose their jobs. The unions have asked for more time to reconsider the creditor's demands. It is widely believed that a workforce reduction is essential in order to find a buyer for Daewoo. The default is believed to further complicate the sale of Daewoo's assets to GM and partner SpA. The U.S. No.1 automaker long has been negotiating for the rights to the assets, recently completing preliminary due diligence.
Weak euro changes's plans
LONDON - Hit by a continually weakening euro,Motor Co. Ltd. says it is postponing plans to build a new small car in the U.K. The automaker also says it will send its U.K.-built CR-V sport/utility vehicle (SUV) to the U.S. The Japanese automaker cannot build the new compact car at its Swindon plant and be competitive with automakers on the Continent and operating in euros, officials say. The euro's value has dropped about 28% since its launch in early 1999. Honda now says it will build the car, which is still in development, in Japan and export it to Europe. The automaker, however, does plan to build the next-generation CR-V for the U.S. at Swindon, increasing CR-V annual production at the plant from 10,000 to 90,000 units. Swindon will build about half the CR-Vs sold in the U.S. Honda had its first loss - $135 million - in Europe last year. The Japanese automaker has poured $2.2 billion into the Swindon plant, which it is expanding, and hopes to make a profit there within two years.
GM revamps Japan dealer network
TOKYO -Japan Ltd. has plans to make use of its underutilized Saturn dealer network in Japan with "GM AutoWorld," the umbrella name of its revamped sales network here. GM AutoWorld initially will feature Chevrolet and Saturn products, using many of the current Saturn retailers. Saturn, which managed to compete against Japanese cars in the U.S., could not find the same success on Japanese turf, selling only 4,000 units in three years. GM is starting with 13 dealers and plans to enhance its new network by including selected Motors Ltd. dealers. The automaker says discussions continue with other Saturn dealers that have expressed interest in joining the new network. GM targets 25 dealers by the end of this year and 100 dealers in four years. The new dealer network is expected to increase sales to 100,000 units in four years, from the current level of 35,000. The dealers plan to add the YGM-1, a small GM car intended for the Asian market, slated to be produced on a Motor Corp. line in Japan.
Jag unveils X-Type, hopes to double sales
LONDON - Jaguar Cars Ltd.'s new X-Type - the company's long-awaited and much-anticipated "baby Jag" - is expected to double the automaker's global sales by 2002. The sedan will be available with a 2.5L or 3L V-6 engine and will have all-wheel drive as standard when it goes on sale next summer in Europe. X-Type will be launched at the Geneva auto show in late February. Jaguar, owned byMotor Co., expects to build 54,000 of the vehicles in 2001 and 89,000 in 2002. This will bring total Jag production to 189,000 units in 2002. The automaker is expected to build a total of 85,000 vehicles this year. While the U.S. remains Jaguar's largest market, Germany and Japan will see increased importance due to the expected X-Type sales in those countries. Jaguar's smallest vehicle will compete with the Mercedes-Benz C-Class, 3-series and Lexus IS300. Prices are expected at about $31,000. Officials say other variants, including a station wagon, are possible. The X-Type will be built at the former Ford Escort plant in Halewood.