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Friday, 12 April, 2002, 15:05 GMT 16:05 UK
Daewoo dealers 'frozen out of US'
Daewoo car
US dealers are angry about GM's decision
Daewoo dealers in the United States are worried they will be frozen out by General Motors' (GM) takeover of the Korean auto manufacturer.

Five hundred US Daewoo dealers are engaged in frantic last ditch lobbying to try and save their businesses.

The dealers invested millions of dollars when Daewoo undertook an ambitious expansion programme in the US.

Walter Huizenga, president of the American Dealers Association, told the BBC's World Business Report that GM had decided not to take the Daewoo dealership in the US.

Last September GM signed an initial agreement to buy two Korean factories from Daewoo plus its overseas operations for $400m (280m).

The completion of the deal has been held up while support has been sought from Daewoo's main union, but the two sides are said to be close to a final agreement.

Hardship

Mr Huizenga said he believed the company would distribute Daewoo cars in the US through existing GM dealers.

"This puts an enormous hardship on the 525 dealers who have built facilities and hired people and trained them," he said.

He added that it also leaves 160,000 Americans who have bought Daewoo cars out in the cold.

Mr Huizenga said they were putting as much pressure as possible on GM, adding, "we believe it is a good business decision to take these dealers".

"These dealers last month sold 5,000 Daewoos with horrible publicity and no market support - imagine what they could do with just a little market support."

Litigation

Several of the dealers are joining together to bring litigation against GM.

During the past 14 months dealers said they were under the impression that they would be part of the overall finalised deal.

Mr Huizenga said dealers felt betrayed because they were told at the 11th hour, "you are not going to be a part of it, and neither are your customers."

A representative of Daewoo in the UK told the BBC's World Business Report that they had no similar concerns about dealership distribution outside the US.

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 ON THIS STORY
Walter Huizenga, American Dealers Association
"It leaves 160,000 Americans who have bought Daewoo cars out in the cold."
See also:

10 Apr 02 | Business
GM-Daewoo deal due 'this month'
03 Apr 02 | Business
Daewoo reduces losses
19 Feb 02 | Business
GM sees Daewoo deal in 60 days
08 Jan 02 | Business
Daewoo cuts jobs to ease merger
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