Still on the road
By : Jeffrey Sparshott
The government will ask South Korean officials for permission to seek out a new strategic investor for Daewoo-FSO Motor (http://www.daewoo.com.pl) when the two sides meet in July, Economy Ministry (http://www.mg.gov.pl/) Vice Minister Edward Nowak said last week.
The request acknowledges that there is little hope the ailing plant will be included in any offer by General Motors to purchase Daewoo Motor, although Polish officials may have to wait until negotiations between the two companies are complete before they begin formal talks with another party. The U.S. auto giant is in negotiations with the bankrupt South Korean firm's creditors to buy its operations, but most observers see the move as supporting GM's strategy in the Asian market and hold out little hope that it wants new European facilities.
"Frankly I have for a long time expected that GM will not be interested in the foreign plants of Daewoo, including the Polish plants," Nowak said. "They would have to bring three plants under one umbrella, Fiat, Daewoo and Opel. As we know GM will probably not be interested.
"We need a different strategic investor," he said.
Nowak heads the government team appointed by Prime Minister Jerzy Buzek to try to save Daewoo's manufacturing operations and jobs in Poland. Economy, Finance and Treasury Ministry officials have met this month to work out a strategy, which includes the pending request to look for a new investor. The Polish team will deliver its request to Daewoo company officials at a meeting scheduled for July 2-3 in Warsaw, Nowak said.
Poland's government and workers at Daewoo-FSO are becoming increasingly concerned about the plant's fate, which was in question even before Daewoo was put under court receivership in November. The procedure allows the car firm to continue operations while looking for a potential buyer.
"The key goal, the absolute basic strategic principle, is to continue the restructuring of Daewoo ... and achieve a stabilization of its operation," Nowak said. "If the company is not sold as part of the talks in Korea, we will try to find another strategic investor for those plants."
Last October Nowak received permission from South Korean officials to seek out a strategic investor for the Daewoo Motor Polska (http://www.daewoo.pl) plant in Lublin, he said. Those efforts bore fruit when Pol-Mot Holdings this month formally agreed to buy a majority stake in the company. But the fate of 3,200 workers at Daewoo-FSO in Warsaw is still uncertain.
"The best-case scenario would be one in which we obtain the rights to work on our own and find an investor," Nowak said. "The worst is one in which we have no investor in Warsaw. A huge property and number of people would, to a large extent, be lost."
Nowak would not name potential investors, although he noted the success with Pol-Mot, a Warsaw-based company that is a Daewoo distributor, and failed talks with Volkswagen.
Nowak also held out the possibility of legal action to force Daewoo to fulfill its obligations under the terms of an incentive-laden agreement with the Polish government that helped bring the company here. "Although I would prefer to find such solutions that would not damage restructuring of Daewoo in Korea and that would respect our Polish interests. Rather than going to court I want to find a solution at the table," he said.
Both sides have remained silent on which assets would be included in the final sale, though Daewoo officials appear to be more focused on the situation in their own country, Nowak said.
South Korea's government is willing to grant tax breaks to GM if the U.S. firm includes an aging, South Korea-based Daewoo plant in its takeover package, but talks appeared unlikely to be concluded in June, according to Reuters.
