UPDATE: GM Daewoo To Become Part Of New GM
June 01 2009 - 11:00AM
Dow Jones News
GM Daewoo Auto & Technology Co., the South Korean unit of
General Motors Corp. (GM), said Monday it will become part of New
GM as the parent company proceeds with its Chapter 11 filing in the
U.S.
"GM Daewoo's vehicle development activities, including GM's
global mini and small car programs based at GM Daewoo, are
continuing as planned," GM Daewoo President and Chief Executive
Michael Grimaldi said in a statement.
All of GM Daewoo's operations in Korea and overseas
subsidiaries, including Vietnam manufacturing operations (VIDAMCO)
and Chevrolet-Europe, as well as GM Korea will also belong to New
GM, said the statement.
But a union spokesman expressed concern when he said "the
agreement that small cars will also be produced in the U.S. may
threaten the status of GM Daewoo as the global manufacturing base
of small cars."
GM plans to be responsible for 70% of its global production
volume of mini and small cars, including the Lacetti Premiere
sedan, in the U.S. by 2013, said the spokesman who declined to be
named.
GM filed for Chapter 11 bankruptcy protection in New York Monday
after a decades-long series of management miscues and production
problems exacerbated by stiff foreign competition and rising oil
prices.
The Obama administration Sunday said the government would
provide an additional $30 billion in financing to GM in return for
60% equity in the new company and $8.8 billion in debt and
preferred stock.
-By Kyong-Ae Choi, Dow Jones Newswires; 822-2198-2236;
kyong-ae.choi@dowjones.com