SEOUL -- Daewoo Incheon Motor Co., which produces cars for General Motors under contract, said last week that it will return to two-shift operations at one of its two plants at the Pup-yong, South Korea, complex for the first time since August 1999.
The second shift was scheduled to begin today, Aug. 18.
Daewoo Incheon was set up by creditors of the former Daewoo Motor Co. Ltd. to operate the Pupyong plant, the bankrupt automaker's oldest and biggest manufacturing site. GM excluded the complex from the agreement that created GM Daewoo Auto & Technology Co. in October, but agreed to purchase its output for the next six years.
The U.S. automaker said it would consider purchasing the plant outright if productivity and quality standards were met while the plant maintains peaceful management-labor relations.
The return to two-shift operations at the plant, near Seoul, draws GM one step closer to taking over the plant, analysts said.
"It's obvious that this could help GM decide to buy the Pup-yong plant," says Kim Sang-Ik, an auto analyst at Daishin Securities in Seoul. "More immediately, it will help GM Daewoo offset sluggish local sales through exports."
Daewoo Incheon says the second shift will double output of the Kalos subcompact to 800 units daily to meet growing demand from North America and Western Europe. The company also said it plans to reintroduce a second shift at Pupyong's Plant 2, which produces the Magnus mid-sized sedan.
Daewoo Incheon recently rehired 716 laid-off workers and said it will bring back 200 more in the third quarter of next year.