GM Daewoo completes acquisition of Incheon Motor

GM Daewoo Auto & Technology Co. said yesterday it finalized the acquisition of Daewoo Incheon Motor Co. and its Bupyung manufacturing facilities in Incheon.

Daewoo Incheon Motor, with an annual production capacity of 400,000 cars and 4,377 employees, manufactures the Kalos, Gentra and Magnus cars in addition to engines and transmissions.

A new midsize sedan to replace the Magnus and GM Daewoo`s first sport utility vehicle, which are scheduled for debut early next year, will be produced at the Bupyung plant as well, the Korean unit of General Motors Group said.

DIMC has already rehired more than 1,000 employees laid off by the former Daewoo Motor Co. in February 2001. An additional 400 former employees are expected to be rehired later this year and early next year for the new SUV production, GM Daewoo said.

DIMC had become an independent corporation when GM acquired the rest of the bankrupt former Daewoo Motor Co. three years ago. DIMC signed a contract with GM Daewoo in October 2002 to provide the automaker complete vehicles, knockdown kits, engines and transmissions. Former Daewoo Motor Co. had collapsed during the Asian financial crisis in 1997-98.

General Motors and its partners had agreed to integrate Daewoo Incheon Motor within six years if it met specific targets for quality, productivity, labor relations and capacity utilization. With the Bupyeong plant making substantial progress on all of the requirements, GM Daewoo began necessary legal proceedings to complete the acquisition immediately following the successful conclusion of wage negotiations in August this year, the carmaker said.

"Over the past three years, DIMC has made significant contributions to GM Daewoo and today accounts for nearly half of GM Daewoo vehicle production.

Its progress has given the management of GM the confidence to approve the early integration of DIMC into our company," said GM Daewoo chief executive Nick Reilly.

Due to strong demand in the domestic and export markets, one of the two production lines in Bupyeong which produces the Kalos and Gentra has added a second shift, with three hours of extra work per shift as well as extra work on the weekends.

(sophie@heraldm.com)



By Kim So-hyun