Canoe

Monday, February 12, 2001

Daewoo temporarily closes assembly lines

SEOUL, South Korea (AP) -- Citing a bulging inventory of unsold cars, ailing Daewoo Motor Co. temporarily shut down some assembly lines at its main plant Monday, effectively foiling a threatened strike.

The shutdown affected all subcompact car assembly lines in Bupyong, west of Seoul. The company plans to suspend production on luxury car assembly lines at the plant on Thursday.

Daewoo said the shutdown, effective until March 6, was meant to reduce a surplus caused by slumping sales, and had nothing to do with the planned strike.

The Bupyong plant has the capacity to produce 300,000 Lanos subcompact cars and also makes two luxury models -- Leganza and Magnus.

The union is upset by the company's plan to shed 5,500 workers by Feb. 16 to improve the terms of its possible sale to General Motors Corp. Daewoo Motor has a total work force of 12,844.

Daewoo has been plagued by frequent work stoppages in South Korea by employees resisting layoffs. The automaker's finances have worsened due to a sharp drop in sales.

Daewoo Motor, South Korea's third-largest carmaker and a flagship affiliate of Daewoo Group, filed for bankruptcy in November with estimated debts of $10 billion. It has been placed under court receivership and creditors have been trying to find a buyer.

-- Rachel Gibson (rgibson@hotmail.com), February 13, 2001