The long-awaited Daewoo Motor Co. Ltd. acquisition move by General Motors Corp. and Italian alliance partner Fiat SpA appears to be underway after numerous fits and starts.

Rudolph Schlais Jr., president of GM Asia/Pacific, and Alan Perriton, executive in charge of GM acquisitions for the region, are expected to arrive in Seoul on Monday, May 28, and make an offer to Daewoo’s creditor banks sometime during the week.

Sources close to the deal tell Ward's Automotive International that the outdated and inefficient Pupyong plant will be excluded from the offer, but that all of Daewoo’s other domestic operations -- two assembly plants and a sales and dealer network operation -- are included. To prevent the immediate dumping of Pupyong’s workforce, GM may present a plan that would draw out the closing of the plant in stages.

Word is that cash will be less than $1 billion -- although Korean security analysts believe the offer must be in the $2 billion to $3 billion range to win creditor bank approval. The banks are concerned with saving face before the Korean public and don't want to be accused of giving Daewoo away too cheaply to foreign interests. This could force negotiations to drag on for months, analysts say, but there is some pressure to present a credible reorganization prior to June 15. That’s when Daewoo’s protection under its Feb. 15 bankruptcy declaration ends and the Korean courts would have the power to order its assets liquidated at public auction.

If GM submits a plan, the courts could extend the reorganization deadline another 90 days. But in order to do that, the proposal must be more than a non-binding promise from GM or a memorandum of understanding to be taken seriously by creditors and the courts.

“If GM does not (make a binding offer), we’ll be in a very awkward situation,” says Daewoo Managing Director Han Young-Chul.

Price is a likely point of contention, and GM insiders say that the U.S. automaker would be acting irresponsibly if Mr. Perriton's negotiating team offered a sweeter deal. Daewoo officials have gone all out to push their employees and bend the books to come up with an operating profit, which was achieved just last month.

But the fact is the insolvent company, which last year posted a net loss of more than $10 billion, needs big investments in virtually all areas to challenge rival No.1 Hyundai Motor Co. Ltd. at home and abroad and other automakers in offshore markets. Hyundai has been waxing rich ever since Daewoo hit the ropes two years ago and is in superb shape, analysts say.

Many observers in Korea say GM deserves kudos for sticking it out and shouldering the massive job of taking on Daewoo -- particularly in light of bitter union denunciations and firebombing of its Seoul headquarters earlier this year.

But whether GM and Fiat will be perceived as white knights remains to be seen. While they are determined to restore the country’s No.2 carmaker, convincing the Korean people of their chivalry still is a hard sell.

GM founded Daewoo Motor and for many years operated it as GM Korea, so the automaker knows the market and what it has to do to revive the car manufacturer, company insiders say.

Even rival Hyundai Chairman Chung Mong-Koo agrees. Hyundai executives say that instead of being scared of the new threat GM poses, Mr. Chung relishes the potential new challenge. o