GM, Daewoo may seal deal soon

Outgoing General Motors Corp. Asia/Pacific President Rudolph A. Schlais says he expects to see a deal in which the auto maker acquires some of the assets of South Korea's Daewoo Motor Co. Ltd. before he retires from the company in April.

GM in September signed a memorandum of understanding to purchase some elements of the insolvent auto maker and now is conducting due diligence. The deal was expected to have been finalized by the end of 2001 but hit some snags, particularly with South Korea's labor unions.

“I think we expected that when we went through due diligence that we would see some areas that needed to be worked on,” Schlais says. “That's happening.”

The main holdup is reaching an agreement with labor — something Schlais says may be turning into a chicken-and-egg scenario between labor and financial agreements, still to be nailed down.

But the process, which involves 21 contracts, is moving along, Schlais says. “If it's held up, so help us, because we've got some really super talent sitting there working on the transition,” he says, adding that GM will not rush a deal for the sake of getting it done if it increases risk to GM or its investors.