UNICH - Daewoo Motor Europe will close its technical center here and shift employees to its design and engineering center in the UK.
But Daewoo says the decision is not linked to the parent company's financial problems in Korea. Indeed, Europe is one of the few bright spots for financially-devestated Daewoo. (See story on Page 12).
The Munich center was opened shortly after Daewoo entered the European market in 1995. It designs and develops engines. The 40 employees here will be offered jobs at the Worthing, England, design center, said a spokesman.
He said the Munich center, which will close in early 2000, 'is a victim of Worthing's success. The facility in Worthing does the lion's share of research and development.'
Worthing, which has 1,000 employees, is the former IAD design facility that Daewoo bought in 1994.
No other layoffs or facility closures are planned for Europe, said the spokesman.
Sales in Europe have risen for the past four years. In the first seven months of 1999, they rose 42 percent to 115,976 units compared to the same period last year. Daewoo still lags behind Hyundai, which has been in Europe longer.
Daewoo has benefited this summer by exporting cars duty free from its plant in Warsaw, Poland, to Italy and Spain, where its Japanese competitors are still restrained by quotas. The imports avoid paying the 10 percent European tax.
In Poland, Daewoo dethroned Fiat as the top-selling make last year.
How Daewoo's problems in Korea will affect operations in Europe is not clear. But some dealers do not yet consider the problems in Korea to be insurmountable.
'It would be amazing if we weren't worried,' said Ives De Cauwur, marketing manager for Daewoo Belgium. 'But our sales in Belgium to date are up 30 percent and we have been getting very good press about our quality.'