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GM may sign Daewoo pact
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August 5, 1999: 11:25 p.m. ET
GM in talks about a new strategic alliance with Korean car maker
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NEW YORK (CNNfn) - General Motors Corp. and South Korea's troubled Daewoo Group are in talks about a strategic alliance with its automotive unit.
An alliance would tie GM's fortunes in Asia closer to Daewoo just seven years after GM (GM) sold its one-half stake in the Daewoo car unit to the Korean conglomerate. The firms have several joint ventures, especially regarding auto components.
"We are in discussions on business opportunities," Henry Wong, a GM spokesman, told CNNfn. He declined to elaborate on the talks but he denied a report that GM is close to buying a controlling stake in Daewoo from its corporate parent.
The president of Daewoo Motors, Kim Tae-gou, called the talks "serious" and said that the talks could lead to handing over managerial control to GM. He, too, declined to elaborate.
The Korea Broadcasting System, citing a source close to the negotiations, said a deal with Daewoo Group to buy the car division could come as early as Friday.
The KBS report did not mention a selling price or size of the possible stake. The reports come amid allegedly mounting pressure against Daewoo from six creditors to get the company on its feet.
The Korean government last week agreed to let state-run banks take charge of changes at Daewoo, the country's second-biggest chaebol, or conglomerate, as it restructures.
A spokesman for Daewoo could not be reached immediately for comment Thursday. GM shares closed Thursday at 61, down 1-13/16.
-- from staff and wire reports
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