SEPT 17: The beleaguered South Korean carmaker Daewoo Motor Company's ambitious plans to infuse $ 100 million and introduce a luxury car in India may get derailed further following the failure of talks with the US-based Ford Motor Company.Daewoo Motor India Limited (DMIL), the Indian arm of the South Korean carmaker, had been awaiting the deal with Ford to be finalised before the roll-out schedule of the new model was worked out. But with Ford having withdrawn from talks to purchase the debt-laden Daewoo and its overseas subsidiaries, the plans seem to have been derailed.According to sources, DMIL's future course of action will be decided only after the restructuring exercise of the parent company is finalised. Daewoo Motor India deputy managing director BS Min, when contacted, refused to comment on the same. The creditors and Daewoo restructuring committee will meet in Seoul on Monday to draw the future course of action, Min said.Quoting Korean newspapers, Min said General Motors and Hyundai have separately claimed to be the best suitor for Daewoo. ``However, auto analysts in Korea and HC Lee, chairman of the ruling party Minjoo-Dang's political measures committee, feel that GM will be the best choice for Daewoo as its acquisition by Hyundai will give the latter a monopoly in the South Korean market, ``which is a cause of concern''.Three South Korean newspapers - Chosun, Hanguk and Seoul Economic Newspaper - have attributed Ford's decision to pull out of talks with Daewoo to the recent problems faced by Ford, in the form of tyre recalls, engine defects and drop in stock price.Replacement of about 6.5 million tyres and the engine (ignition parts) defect have had a severe impact on the bid. In addition, Ford's stock price had drastically dropped (to the extent of 50 per cent) in the recent past. Further, Ford originally had $ 20 billion cash with it. Of this, the company had last year spent $ ten billion in taking over Volvo and other brands. With the current cash reserve, there is no room for Ford to purchase Daewoo Motor Company, the newspaper reports said.Meanwhile, a GM spokesman in Korea had reportedly said that the world's largest carmaker was still interested in a possible deal with Daewoo. Daimlerchrysler said in Stuttgart that it has no plans to bid for Daewoo. The company was ``too risky'' and needed ``much restructuring'', Daimlerchrysler had said.As negotiations began in July with Ford, Daewoo was considered to be a great prize. Its capacity of 2.1 million cars a year offered juicy long-term economies of scale if engines and components could be shared. Daewoo would have also offered Ford access to previously closed markets like South Korea, and easier entry into other Asian markets, tipped to lead global car sales growth for years to come.Ford's purchase would have been, by far, the largest foreign takeover of a Korean company and would have enabled it to near the output level of the world's top-ranked General Motors. The US auto giant in June beat out joint bids by GM and Fiat Spa, and Daimlerchrysler and Hyundai Motor for the right to conduct exclusive negotiations with Daewoo about taking over its assets.South Korea's top economic policymakers have issued a deadline for creditors of debt-laden Daewoo motor to come up with a blueprint to sell the carmaker after US auto giant Ford abandoned the deal.``We told creditors to prepare by Monday a blueprint for the sale and survival plans for the carmaker until the takeover,'' a joint statement after a meeting of economic-related ministers chaired by Finance Minister Jin Nyum said. The meeting followed Ford's surprise announcement on Friday that it would not make a final bid for Daewoo Motor which could have come up to 7.7 trillion won (6.9 billion dollars).
