DETROIT - General Motors Chairman Jack Smith wants to acquire debt-laden Daewoo Motor Co. as soon as possible, but one obstacle stands in his way: Ford Motor Co.
'Our only concern with that is a troubled company like this (Daewoo) weakens by the day, and the longer it takes the less this place is worth,' Smith said in a speech to the Automotive News World Congress.
GM submitted a tentative offer to the South Korean government and Daewoo's creditors late last year. GM reportedly offered $6.4 billion for Daewoo. GM was not willing to take on any of Daewoo Motor's debt, about $15.7 billion at recent exchange rates.
But when Ford expressed an interest in Daewoo, the government decided to auction off the company.
'There was a high chance of that happening. And it did happen,' Smith told reporters after his speech.
Daewoo's creditors expect to pick a buyer in March and have a deal by June.
GM wants Daewoo because its assembly plants in Korea, with annual capacity of more than 1 million vehicles, would significantly expand GM's Asian base. GM wants to increase its market share in Asia to 10 percent from about 4 percent currently.
'They are a low-cost producer,' Smith said. 'They have an excellent base in Korea. And their products are derived from General Motors products and their powertrains are General Motors powertrains. So we see quite a bit of synergy and see ourselves as a natural partner.'
GM is interested in some of Daewoo's other assets, such as Daewoo's assembly plant in Poland and its growing market share in Central Europe. But even the Poland plant, with 20,000 employees, needs serious restructuring, Smith said.
Daewoo has assets that GM does not want. 'It has some capacity in Uzbekistan, Romania and the Ukraine that I don't think anybody wants,' Smith said.
The deal, if it happens, will be extremely complex, Smith said. Daewoo has operations in many countries with cross ownership between various Daewoo subsidiaries and several partners.
Said Smith: 'This is about as tough and as difficult a transaction that I've ever participated in. The longer it's delayed, the worse it gets.'