General Motors will continue selling Daewoo cars in Europe and North America only if they can be profitable.
That is a major focus of current due-diligence efforts, said GM CEO Rick Wagoner in an interview.
'Philosophically, if selling vehicles in Romania is a money-loser for Daewoo in Korea, we can't do that,' Wagoner said. 'Daewoo has to be standalone financially.'
But GM is still studying Daewoo export sales. 'That's the area we have spent the least amount of time on,' Wagoner said. 'To be perfectly honest, our strategy is not fully thought out.'
GM has said its main goal is gaining entry to Korea and adding capacity to serve Asia-Pacific markets.
General Motors will send no more than 25 executives to Korea to run the Daewoo successor company if GM completes the deal to buy key Daewoo assets.
Wagoner said GM is determined that the new Daewoo will not drain GM's management or financial resources. Daewoo middle management is strong, so GM can keep direct management involvement minimal, he said.
'We'll want to put in a reasonable sprinkling of senior people,' Wagoner said. 'But just to give you context, we're talking 10 or 20, not 50 or 100. Maybe it's 25.'
Wagoner said GM expects a final deal by the first or second quarter of 2002. GM expects 'at least one' of its alliance partners - Fiat Auto, Suzuki, Isuzu and Subaru parent Fuji Heavy Industries - to take an equity stake in the new company.
In September, GM and its partners agreed to pay $400 million (E447.2 million) for 67 percent of the new company. Daewoo's creditors would pay $197 million for 33 percent. GM would be the largest single shareholder, but would not hold a majority stake.
The new company would own Daewoo plants in Changwon and Kunsan, research and development and die-casting operations at Pupyong, manufacturing plants in Egypt and Vietnam, and 22 Daewoo sales companies outside of Korea. Also, it would not own but would buy vehicles and components from the older Pupyong plant for six years.