Daewoo-FSO hopeful of Hyundai takeover
By : Magdalena Wierzchowska
In the latest chapter of the saga to save Daewoo Motor's ailing Polish operations, one of the Korean car company's fiercest adversaries, Hyundai Motor, has been named as a possible savior.
While Korea's minister of commerce, industry and energy, Shin Kook-hwan, said that Daewoo may get rid of its Polish plants, Reuters quoted an anonymous source within the Korean government who said that Daewoo's management may be handed over to Hyundai Motor if current negotiations fall through with U.S. auto maker General Motors (GM).
"Next month, GM will certainly place an offer for the purchase of Daewoo, but if GM backs out as Ford did or the sale does not succeed because of the low price, we'll present emergency plans," Reuters quoted the government representative as saying. "One of them predicts that the management of Daewoo may be signed over to Hyundai Motor."
Hyundai has so far denied any interest.
A spokeswoman for Daewoo-FSO Motor in Warsaw, Krystyna Danilczyk, said she doubted that the two Korean giants, which have been in a tough battle for the Korean market, could come to an agreement in Korea, but she believed Hyundai's potential involvement would be a good solution for Daewoo's factories overseas.
This is in stark contrast to Shin Kook-hwan's statement in the Korea Herald. "If Daewoo Motor fails to be sold to GM, it will have to get rid of its Polish plant, Daewoo-FSO, among others," he is quoted as saying.
Daewoo representatives in Warsaw downplayed Kook-hwan's statement.
"It doesn't have any influence on us," Danilczyk said. "The Polish government, creditor banks and Daewoo Motor will decide (on the future of Polish factories)." Danilczyk added that Daewoo Motor in Poland would most likely issue a statement denying the Korean minister's comments.
Contrary to Kook-hwan's declaration, Friday's anonymous statement in Reuters suggesting Hyundai as a new player is more in line with Polish expectations.
Economy Minister Janusz Steinhoff has long declared that the best solution for Daewoo's Polish factories would be a takeover by a manufacturer without any operations in the country. Danilczyk said that shifting production to Hyundai would be neither time-consuming nor costly. "Only small details would have to be changed," she said.
Daewoo Motor's situation has been deteriorating each month after the U.S. car manufacturer Ford withdrew from takeover negotiations last September.
"Company creditors said they won't give further support to the company after July," according to the anonymous government source quoted by Reuters. Korea expects GM to decide on Daewoo by April 30. "The government expects some response from the U.S. auto giant by the end of next month," Kook-hwan was quoted as telling the Korea Herald last week.
