NZ car dealer resists Daewoo's woes

By DANIEL RIORDAN

Daewoo New Zealand says it will be business as usual after the Daewoo Motor company in South Korea was declared bankrupt and placed in receivership.

Russell Burling, owner of Daewoo NZ, said Daewoo owners should not worry about obtaining parts for their cars.

And he did not foresee any problems in buying Daewoo cars.

Mr Burling, who bought Daewoo's local operations three months ago, said he expected the Korean company to trade through its receivership.

Korean analysts said that General Motors and Fiat, in a joint bid, looked the most likely buyers for the embattled company, and cars and parts would continue to be made under the new ownership.

Daewoo suspended production at its biggest plant yesterday as car parts makers demanded cash before they delivered components.

The plant that closed, at Pupyong, near Seoul, has an annual production capacity of 500,000 vehicles, although it had been operating at only half that level.

But while Mr Burling was optimistic, some competitors speculated that a long-term stoppage at the Pupyong plant could affect the New Zealand company's ability to meet its customers' needs.

Mr Burling said New Zealanders bought 1820 Daewoos last year and about 7000 were on the road.

Creditors declared Daewoo in default of its loans after the company failed to reach an agreement with its union on job cuts.

Daewoo's creditors had been trying to nurse the company back to health for more than a year as part of a Government-sponsored programme set up for Daewoo Motor when the Daewoo Group collapsed in July last year.

The company, which has $US30 billion ($75 billion) of debt, has been up for sale for several months.