Daewoo to axe 187 jobs

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The Independent Online

The ailing South Korean carmaker Daewoo is to cut another 187 jobs at its UK technical centre under its cost-saving measures, the company said today.

The ailing South Korean carmaker Daewoo is to cut another 187 jobs at its UK technical centre under its cost-saving measures, the company said today.

Workers at the Worthing site in West Sussex which employed 750 workers before the parent company went bankrupt, got the news at a meeting today. The cuts will take effect immediately and will reduce the workforce by 40 percent, leaving 250 employees.

Daewoo has been plagued by frequent work stoppages in South Korea by employees resisting layoffs. The automaker's finances have worsened due to sharp drops in sales from 945,000 in 1999 to 830,000 in 2000. Sales in January were just 38,700, compared with 80,600 during the same month a year ago.

Daewoo Motor, South Korea's third largest carmaker and a flagship affiliate of Daewoo Group, filed for bankruptcy in November with estimated debts of $10 billion. It has been placed under court receivership and creditors have been trying to find a buyer.

Daewoo Group had been a symbol of aggressive expansion on borrowed money until it narrowly escaped becoming the nation's largest bankruptcy in 1999, when domestic creditors agreed to delay repayment of its short-term debt and extend new loans.

These cuts came on the same day as the company temporarily shut down some assembly lines at its main plant in Korea, effectively foiling a threatened strike by workers. Daewoo cited a bulging inventory of unsold cars as the reason for its action.

The move today affected all subcompact car assembly lines in Bupyong, west of Seoul. The company plans to suspend production of all luxury car assembly lines at the plant beginning on Thursday.

Daewoo said the shutdown, which will remain effective until March 6, was meant to reduce an inventory caused by slumping sales and had nothing to do with a planned strike by workers on Monday.

The Bupyong plant has the capacity to produce 300,000 Lanos subcompact cars and two luxury models - Leganza and Magnus. Daewoo said its two other plants, with a combined capacity of 500,000 cars and 46,000 commercial vehicles, will continue to operate.

Frustrated union leaders accused management of timing the shutdown to coincide with their plan to organize a full-scale strike for 6,500 workers at the main plant.

"We failed to launch a full strike because many workers didn't show up because of the plant shutdown," said Choi Jong-hak, a spokesman for Daewoo Motor's labour union.

The union is upset by the company's plan to shed 5,500 workers by February 16 to improve the terms of the company's possible sale to General Motors Corp., which is reportedly reluctant to proceed with the negotiations without layoffs.

Many workers have quit voluntarily since the layoff plans were announced in December. However, Daewoo still has to shed some 1,900 more workers to meet its layoff plan. Daewoo Motor has a total work force of 12,844.

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