Yes, General Motors was shrewd in picking up the best parts of Daewoo Motor Co. at a fire-sale price. But if GM thinks that it can escape responsibility for Daewoo's now-orphaned U.S. sales operation, it must think again.
GM must drop the charade that it acquired only "certain assets" of Daewoo Motor, as though it had purchased a basket of nuts and bolts at the neighborhood hardware store. It
doesn't wash. By purchasing Daewoo's principal plants and taking over the means of production, GM has purchased de facto control of the bankrupt Korean automaker.
As the purchaser, it cannot duck all responsibility for the 525 U.S. dealers who have been hung out to dry because of this deal. Many have sunk hundreds of thousands of dollars into their franchises in the understandable belief that Daewoo would have a future in this country with GM.
There are three vital reasons for GM to act:
First, integrity. True, GM made no hard promises to take care of anyone. But it included the U.S. sales operation in the memorandum of understanding - the tentative offer for Daewoo - it signed seven months ago when it began firm takeover negotiations. And so Daewoo dealers could reasonably expect to believe they would be part of the deal.
Second, reputation. Without Daewoo Motor America around to blame, GM will take the wrath of Daewoo dealers and consumers who feel they have been wronged.
Finally, self-interest. Unless something is done to protect the consumers who purchased Daewoo vehicles and the U.S. dealers who sold and serviced them, protracted litigation is almost a certainty. By continuing to duck the issue, GM is only inviting a more severe legal challenge.
Now that the deal has been signed, GM must address the significant and serious needs of these dealers.