South Korea Says GM Is Not Expected To Pay Daewoo Suppliers – General Motors – Brief Article – Statistical Data Included
South Korean Finance Minister Jin Nyum said he did not expect General Motors to settle payment claims from suppliers that have cut off the delivery of parts to Daewoo Motor. “I expect creditor banks and Daewoo management to handle the issue,” Jin said at a recent meeting.
Parts suppliers owed more than 850 billion won ($672 million) by South Korea’s third largest automaker have recently stopped supplying Daewoo while demanding payments needed to prevent many from collapse. GM signed a memorandum of understanding (MOU) in September to take over part of Daewoo’s operations and offered to shoulder up to $250 million in liabilities.
The finance minister said he expected both sides to honor the MOU. Daewoo’s three main plants were idled on as suppliers and Daewoo’s banks both dug in their heels. “We have no plans yet to change our stance to indefinitely halt our parts supply,” Cho Hang-kyun, a representative of the suppliers, said.
Jung Keun-yong, governor of main creditor Korea Development Bank (KDB), told reporters there was no room to compromise. The finance minister said the government would let the two sides settle the issue, but suggested the suppliers needed to compromise. “Parts suppliers should bear (some) responsibility themselves,” he said.
GM and Daewoo’s creditors are aiming to finalize GM’s purchase of four Daewoo plants by year’s end.
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