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Daewoo Plans to Cut 6,500 Jobs
Daewoo Motor, the bankrupt carmaker struggling to stabilize its finances, said Monday that it would eliminate 6,500 jobs, or one-seventh of the work force, at a string of overseas subsidiaries that it spent $5 billion to acquire in the 1990's. Plants in India and Poland may become independent through debt-for-equity swaps, the company said.
The moves came amid mounting doubts that General Motors, the main hope for the company's long- term salvation, would buy the company.
The committee of creditors now running Daewoo Motor have been searching for a new buyer ever since Ford Motor withdrew its $6.9 billion bid last September.
The company had said it was no longer able to support its overseas plants, acquired by the former Daewoo group chairman, Kim Woo Choong, in an aggressive expansion campaign. Mr. Kim left the company under a cloud of scandal and is believed to be in hiding in Europe. Seven of his former subordinates are in jail awaiting trial on charges of misleading creditors.
General Motors, which owned half of Daewoo before 1992 and sold its stake back to the company for $200 million, began new talks to take over the company at the height of Korea's economic crisis in 1998, but has not consummated a deal because of concerns about the company's debts, now estimated at $15 billion, and strife with its unions over layoffs.
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