GM Submits Final Offer for Bankrupt Daewoo

U.S. auto giant General Motors Corp. has submitted a final offer for South Korea’s bankrupt Daewoo Motor, excluding the auto maker’s largest plant, a senior Finance Ministry official told Reuters.

The main plant at Pupyong has been the major stumbling block to concluding talks, the official said.

“GM has submitted a final offer for Daewoo Motor, but the main Pupyong plant has been excluded,” the official said.

The U.S. auto giant declined to comment.

GM and partner Fiat of Italy submitted an initial proposal in May to acquire Daewoo, Korea’s third-largest auto maker in terms of sales, but have said little since then about the progress of talks.

The official said creditors were trying to balance economic realities and a possible public backlash that could result from excluding the Pupyong plant in a GM takeover.

The plant, Daewoo’s largest and most antiquated, employs almost half the auto maker’s 15,000 domestic workers and supports thousands of jobs at subcontracting and related firms.

The plant was the scene of fiery protests by unionized workers after layoffs in February.

“The fate of the Pupyong plant cannot be resolved based purely on economic considerations and it is a politically sensitive matter,” the official said.

“But now is the time to make a decision. Time is not on our side.”

Deputy Premier and Finance Minister Jin Nyum said he would personally take the blame if the sale fell through or was found disappointing, underscoring its political significance ahead of presidential elections next year.

Since rescuing Daewoo Motor in August 1999, it has cost creditors $2 billion in support funds to keep the auto maker running.

The delay in selling Daewoo Motor has battered the value of the company.