GM-Daewoo talks remain stalled

Published reports that General Motors Corp. and Daewoo Motor Co. Ltd. are in final talks are wrong, sources close to the situation tell Ward's. As of press time, no date had been set for resumption of talks between the two sides, which includes the state-owned Korean Development Bank, the bankrupt automaker's chief creditor.

Jin Nyum, Korea's finance and economy minister, last month reportedly told a meeting of businessmen and government officials that the “two sides are putting final touches on negotiations.” His comments apparently pushed shares of Daewoo Motor Sales, the unlisted automaker's sales arm, up by 9.8% after a slide in the previous week.

The negotiating parties did meet twice in Hong Kong during June, at which time GM is said to have laid out its offer for all or part of Daewoo's assets. Industry observers at the time said the two main issues of contention were the price GM was offering, said to be below $1 billion, and the desire on the part of the KDB to have the aging Bupyeong plant, which builds the Daewoo Leganza, included in the deal. Sources say that GM prefers not to buy the plant.

Industry observers say they are stymied by the situation, and find it curious that Daewoo seems to have stalled in coming up with a counter proposal.