General Motors is buying many of the assets of bankrupt Daewoo Motor Co. of South Korea, not including its U.S. sales and parts operations. GM will pay about $400 million for three plants and the company's sales networks in Europe and Puerto Rico.
GM says it will use the plants to build "a new generation of cost-competitive vehicles that can be marketed around the world." Two of the plants are in Korea; the third is in Hanoi, Vietnam.
The company did not rule out the possibility that vehicles built in Korea and Vietnam would eventually be imported into the U.S. and sold under a GM brand name. It will continue to use the Daewoo brand name in parts of Europe and Korea.
GM says it will honor warranties on Daewoo vehicles in North America. But as for Daewoo's 525 U.S. dealers and their thousands of employees, the future looked bleak.
A trade publication estimated there are about 7,000 Daewood vehicles sitting in port, waiting to be shipped to Daewoo dealers, who are already wondering what to do with the unsold vehicles sitting on their lots. Most will probably be sold at auction.
Daewoo entered the U.S. market in 1988. it sold 68,000 cars in 2000, its peak year, but sales plunged the following year when the company declared bankruptcy.