Daewoo cuts U.S. work force by nearly 25%

LOS ANGELES - Daewoo Motor America, the U.S. sales arm of Korea's embattled Daewoo Motor Corp., slashed nearly one-quarter of its 220 jobs last week in a move that raises questions about its ability to continue as a viable company.

The company cut 50 administrative and dealer-support jobs, said Daewoo's senior vice president of marketing, Gary Connelly. Another 20 jobs had been eliminated in the past few months through attrition, he said.

Connelly said most of the cuts were from the company's dealer support network. "Almost everybody will report directly to national now," Connelly said. "The dealers will have more direct contact."

Under the reorganization, Daewoo has collapsed its four regions into two sales areas: an Eastern area headquartered in Atlanta, and a Western area in Los Angeles.

Area sales managers will contact most of their stores by phone instead of visiting on-site. Connelly said this will cut expenses by about $1 million per month.

The plan also eliminates regional managers for parts and service field staff; the store operations department and the public relations department; and it consolidates several other functions, such as corporate planning, into a four-person marketing department.

Todd Turner, principal of the Car Concepts market research firm in Thousand Oaks, Calif., says the cuts effectively signal the end of Daewoo.

"They're broke. I think they're just waiting for the fat lady to sing," he said.

But Kirk Kelly, general manager of Cerritos Daewoo in Los Angeles, said he was optimistic about the plan.

"If they fired 70 employees, they're probably down to where they need to be," he said. "They have too many people to do too few jobs."

Daewoo's sales through July are off 13.1 percent from the same period a year earlier, to 34,427. For July, Daewoo sales were off 41.6 percent. Average sales per dealer for the year have fallen below 10, and slumped to 6.8 in July.

The Korean parent is awaiting word on a possible acquisition by General Motors. GM in May signed a letter of intent to purchase the embattled automaker, which carries liabilities of some $18 billion.

But GM CEO Rick Wagoner has openly questioned the future of Daewoo's U.S. sales arm as a GM subsidiary.

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