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Fri, Feb 13, 2009 - Page 10 News List

S Korea cool to GM Daewoo help request

AFP , SEOUL

The troubled South Korean unit of US auto giant General Motors Corp (GM) has called for government help for the local industry, but Seoul has no immediate plans for direct aid, an official said yesterday.

GM Daewoo Auto and Technology president Michael Grimaldi visited Knowledge Economy Minister Lee Young-ho on Wednesday and suggested the government help the local auto industry, Lee’s office said.

“Lee said the government would consider the request,” a ministry official who attended the meeting said on condition of anonymity.

“However the government’s stance is not to provide direct assistance to an individual company,” the official said, without elaborating on the meeting.

The government has said creditor banks should lead the process of restructuring or salvaging ailing firms, maintaining that direct aid breaches global trade rules.

It previously ruled out help for Chinese-owned Ssangyong Motor, which has received court protection from creditors as it tries to turn itself around.

A GM Daewoo spokeswoman confirmed the meeting, which she said was “to explain the situation of GM Daewoo and the global economic situation.”

She gave no details.

A sharp drop in demand amid a deepening global recession has forced GM Daewoo and other Korean automakers to temporarily suspend some production.

On Feb. 5, GM Daewoo started idling its plant for Winstorm sport-utility vehicles and Tosca sedans for 10 days, and it also plans to suspend production at other plants.

Last month the country’s third-largest carmaker, acquired by GM in 2002, saw its vehicle sales plunge 50.5 percent year-on-year to 45,842 vehicles.

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