Smith and Reilly defended the decision to exclude the U.S. sales network as necessary to GM's plans to resuscitate what it considers the salvageable parts of Daewoo.
"This was a horrendous situation with debt levels of $16 billion. The place was completely broken," Smith said. "We couldn't take the whole place.
"We had to make a judgment on what sales operations we could afford to take, recognizing that we had to get this operation turned around and profitable within a couple of years. So we made the calls on what we could do and couldn't do. In the case of the United States, we're not taking the sales distribution system. So that will eventually put Daewoo out of business there."
Aside from the potential dispute involving Daewoo's U.S. dealers, however, Smith was upbeat about finally concluding the long-running bid for the failed Korean company.
The new company will control two assembly plants in Korea with a combined capacity of 520,000 vehicles a year and access to Asia's second-largest light-vehicle market after Japan.
The agreement also gives the new company an option to acquire the sprawling Pupyong plant at any time within six years. It will remain open and continue to supply the new company with vehicles, engines, transmissions and components for at least six years.
"It's going to take some time to roll it through, but we're pretty excited about what this does for us, particularly in Asia Pacific," Smith told Automotive News.
"It gives us a base of a significant number of vehicles that we can really use to improve our position in a number of countries: China to Thailand to India to Indonesia - you name it."
Merrill Lynch analyst John Casesa praised the deal, saying in a report that the transaction "should give GM relatively low-cost and new capacity in Asia, as well as serve as a product development and export source for small cars globally."
He added that GM's production capacity in the world's growing emerging markets jumped 40 percent with the deal, from 1.47 million to 2.03 million.
The new company will take over Daewoo's existing sales arms in nine western European countries, Australia, New Zealand and Puerto Rico.
The Daewoo brand will continue in the countries where the new company is buying the existing sales networks. In other markets, it is not clear whether the new company's cars will be badged as Daewoos.
From Daewoo's extensive manufacturing network outside of Korea, GM is buying a single plant, in Hanoi, Vietnam.
There is no room in the new operation for Daewoo's other plants in Poland, Romania, Czech Republic, Uzbekistan, Ukraine, India, Libya, China or Egypt. Most have seen it coming.
The plant in Warsaw, Poland, has been for sale for more than a year. It produces the Matiz, Nubira and Lanos vehicles, plus the Polonez, a car based on a 20-year-old Fiat, but the GM-Fiat alliance already has a strong presence in Poland.
Daewoo had spent $1.1 billion renovating the former communist factory, which can produce 400,000 vehicles a year. Last year it built just 90,000 cars.
The plant was part of an expensive, high-risk strategy to build assembly plants in some of the world's poorest regions in the 1990s.