Daewoo Motor has been forced to stop work at its three main vehicle plants as parts suppliers will not provide components until they have been paid.
Daewoo Motor has been forced to stop work at its three main vehicle plants in Seoul as parts suppliers will not provide components until they have been paid.
The South Korean manufacturer owes about R66 billion in unpaid bills.
Daewoo was declared bankrupt in November last year, but has been saved by General Motors. The American company signed a memorandum of understanding to buy four plants for R4 billion. But the deal has not been finalised yet. GM would not say if the enforced shutdown would affect the deal, which is expected to be finalised later in December.
The suppliers had informed Daewoo last week that they would stop supplying parts for a week if they were not paid. “Daewoo must come up with a way to repay our debts,” said Yu Seok-kyu, an official who represents Daewoo’s suppliers. About 20 suppliers are affected.
Daewoo said it was not too concerned about the latest setback and it had enough vehicles to last for a week. “We are continuing to negotiate with the parts suppliers,” Daewoo Motor spokesman Kim Sung-soo said.
“I think both sides still remain optimistic,” GM spokesman Rob Leggat said of the deal. “It’s a complicated deal, as you know, and it takes a lot of work.”