GM Daewoo to spend 2.5 tln won in S. Korea

GOYANG, South Korea, April 2 (Yonhap) -- The South Korean unit of General Motors
Corp. said Thursday it will spend 2.5 trillion won (US$1.84 billion) in facility
investment by 2010 as its parent reels under the threat of bankruptcy.
GM Daewoo Auto & Technology Co. President Michael Grimaldi also said the U.S.
automaker will begin selling the Chevrolet Volt plug-in hybrid car in South Korea
in 2011 to "gauge consumer demand."
"We got off to a rough start this year amid a severe economic crisis and slow
automotive demand worldwide," Grimaldi said on the sidelines of the 2009 Seoul
Motor Show.
"But we are taking necessary actions to overcome the crisis... and plan to invest
2.5 trillion won by the end of next year to build new facilities," Grimaldi said.

This week, the administration of U.S. President Barack Obama rejected plans for a
turnaround by GM and Chrysler LLC, giving them one final chance to save their
companies. He also warned that GM may have no choice but to face bankruptcy if it
fails to map out sweeping cost-cutting plans and concessions with the United Auto
Workers union and bondholders.
Despite mounting concerns over GM, Grimaldi said GM Daewoo will "stay in focus"
to become a global leader in automotive design.
Hit by a looming liquidity crisis, GM Daewoo is also seeking one trillion won in
financial aid from South Korea's state-run Korea Development Bank, which to date
has shown little sympathy for the automaker's request.
Grimaldi unveiled a version of the Chevrolet Volt for the first time in Asia
during a recent exhibition here.
Designed to be rechargeable at conventional power outlets, the Volt will be able
to run 64 kilometers on battery power alone, with an internal combustion engine
that increases its driving range.
"The Volt is a game-changer," Grimaldi said. "This represents the future
direction of the automotive industry and GM Daewoo."
"We plan to release a small fleet of the Volt in South Korea in 2011 to gauge
consumer demand," he said.
Since December last year, GM Daewoo has idled or closed some production lines as
sales plunged. GM Daewoo is closing its plants for as many as 10 days in April.
In March, GM Daewoo said its auto sales plunged 48.5 percent to 44,957 units,
with domestic sales dropping 44.6 percent to 5,708 units and exports diving 49
percent to 39,249 units.
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