Wednesday September 26, 9:52 am Eastern Time

Daewoo Workers Protest GM Takeover

Hundreds of Daewoo Motor Workers in South Korea Protest GM Takeover

By JAE-SUK YOO
Associated Press Writer

SEOUL, South Korea (AP) -- Hundreds of Daewoo Motor Co. workers rallied in Seoul on Wednesday, protesting the sale of the carmaker to General Motors Corp. of the United States.

``Let's block the cheap sale,'' chanted 600 workers, pumping clenched fists.
Many of them wore red headbands with signs that read ``Solidarity.''
Workers burned paper boxes, bearing signs ``cheap sale'' and ``GM,'' during the hour-long rally in front of the head office of state-run Korea Development Bank, Daewoo Motor's main creditor.

Some 2,000 helmeted riot police, armed with plastic shields, stood guard. Therewere no reports of arrests.

Last week, GM signed a nonbinding agreement with Daewoo creditors to acquire the control of the bankrupt South Korean carmaker. GM plans to sign a binding accord before year's end. The preliminary deal calls for complex financial arrangements to split risks, including $400 million in direct investment from GM.

Many protesters were from Daewoo's main plant which was excluded from the GMtakeover deal. The plant's 6,000 workers fear that the sale of their company would lead to mass layoffs.

Under the preliminary deal, GM agreed to take over two of three local Daewoo plants and 22 overseas subsidiaries, along with manufacturing facilities in Egypt and Vietnam.

The deal did not cover Daewoo's largest plant at Bupyong west of Seoul, which experts say is inefficient. The plant will remain open, providing vehicles, engines and other components and GM will consider buying the plant at some point in the future.

It also excluded Daewoo's other overseas production plants in 12 countries, including Poland and China.

Daewoo Motor filed for bankruptcy last year with an estimated debt of $17 billion. It has since been under court receivership and state-controlled creditor banks funneled billions of dollars to keep the carmaker afloat.
Despite heavy debts, Daewoo Motor can help GM break into South Korea's closed market, and could bolster attempts to advance into China, a key target for future growth of American automakers.

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