GM Daewoo extends plant shutdown in March

SEOUL, Feb. 27 (Yonhap) -- The South Korean unit of beleaguered U.S. automaker General Motors Corp. said Friday it will extend a production stoppage at its two plants in March amid a steep decline in sales and a liquidity shortage.

GM Daewoo Auto & Technology Co. has been idling its three plants in South Korea
since early December last year as mounting financial woes at GM and the global
economic downturn have dried up the company's cash reserves.
Output at GM Daewoo's plant in the city of Gunsan, 274 kilometers southwest of
Seoul, will be halted for 10 days next month, a company official said.
Another plant in the city of Bupyeong, near Seoul, will intermittently suspend
production in March, the official said.
"But the remaining Changwon plant, which builds Matiz mini cars, will be fully
operational in March," the official said.
The prolonged production stoppages come as the South Korean government and
creditor banks have shown little sympathy over GM Daewoo's request for financial
assistance.
GM Daewoo, the third-largest carmaker in South Korea, has sought one trillion won
(US$658 million) in emergency funding from the nation's state-run Korea
Development Bank to help it stay afloat.
According to local news reports, GM Daewoo has already reached its credit limit
of 1.37 trillion won from the state-run bank and the carmaker has $750 million in
loans coming due in October.
Early this month, GM Daewoo Chief Executive Officer Miachel Grimaldi asked the
South Korean government to provide financial support, though his request was
turned down by government officials amid fears of a potential bankruptcy at GM.
GM Daewoo's vehicle sales last year declined eight percent to 881,959 units. In
January this year, sales plunged 50.5 percent from a year ago to 45,842 vehicles.

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