LOS ANGELES -- A dying Daewoo Motor America Inc. last week said it has laid off 65 percent of its 175-person staff, including the entire sales and service network.
Skeleton crews remain at the company's two parts warehouses in Atlanta and Compton, Calif.
"We have essentially eliminated our field organization," said a Daewoo executive who asked not to be identified. "We reduced our people here (in the Compton headquarters) by about half."
The executive said the company was still operating and communicating with its dealers. Daewoo's remaining employees had been paid in advance for 30 days, he said.
"After that it's uncertain what will happen," he said.
Daewoo did not release a statement, and the extent of the cuts could not be verified. But another source close to Daewoo management said only 14 employees remain in the company's headquarters, and they have been told to prepare to leave.
"They've all been paid in advance to wind it down," the source said. "They've been told to close everything by May 24."
Daewoo Motor America, a subsidiary of Korea's Daewoo Motor Co., is in debt to both its dealers and a Chicago lender, PPM America Inc., which has a 70 percent lien on about 10,000 Daewoo cars stored in California ports.
Daewoo's dealers still are owed money for rebates, warranty service and advertising for March, an amount Daewoo said was mailed to them Thursday, April 25, after some dealers had been told not to expect it."They said to me, 'We're not sending any checks. We have no money,' " said one dealer in the Northeast. "And at some point you have to pull the plug. I've got to tell customers, 'I'm sorry, we can't cover your warranty.'"
Daewoo Motor America's cash flow dried up in March when dealers stopped ordering cars after it became apparent that General Motors did not want to purchase the U.S. subsidiary.
Daewoo Motor America has been a stumbling block in negotiations between Daewoo Motor Co. and GM.
The two companies continue to negotiate a deal by which GM will take over key assets of Daewoo Motor Co.