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Monday, 24 September, 2001, 12:13 GMT 13:13 UK
Daewoo deal 'favours' GM
Daewoo and GM executives shake hands as the US giant takes over parts of the bankrupt car maker
GM's deal left chunks of Daewoo Motor behind
The car giant General Motors' supposed role as a "white night" rescuing South Korea's Daewoo Motor has been tarnished by analysts who say it is in the company's own interests.

Analysts say GM's non-binding agreement to take over parts of the bankrupt car maker will do more for the US company than for the South Korean one.

Some say the price GM has agreed to pay is a serious under valuation of Daewoo Motor, even though, in the words of JD Power and Associates analyst Jeff Schuster, "there would definitely be capital needs going forward that would increase the overall price tag".

More to the point, the state-run Korea Development Bank pointed out that Daewoo plants in ten countries could face liquidation unless they undertake serious cost cutting measures and slash several thousand jobs in bids to attract new buyers.

Bad news for Daewoo Motor and South Korea, perhaps, but there are two sides of the coin.

"The deal's structured a lot more favourably to GM than I feared it would be," said Standard & Poor's analyst Efraim Levy, applauding the deal.

At least two of the car production plants rejected by GM could survive; its Indian and its Polish facilities are attractive take-over targets according to observers.

See also:

21 Sep 01 | Business
GM signs Daewoo deal
18 Sep 01 | Business
GM 'optimistic' on Daewoo deal
31 Aug 01 | Business
Daewoo Motor sale deadline passes
30 Aug 01 | Business
Daewoo sale deadline looms
15 Aug 01 | Business
Daewoo's fourth month of profits
14 Aug 01 | Business
Daewoo Motor sales collapse
24 Jul 01 | Asia-Pacific
Daewoo executives jailed
30 May 01 | Business
'GM bids 540m for Daewoo'
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