GM CEO to Discuss Daewoo Loan

GM's CEO Fritz Henderson is discussing with state-run Korea Development Bank over a potential loan package for GM Daewoo, an ailing automaker that has been severely hit by the global recession. KDB currently holds 28 percent of GM Daewoo, while the US-based manufacturer owns 51 percent of the company. According to just-auto.com, GM Daewoo wants to loan one trillion won ($855 million).

KDB officials emphasized that General Motors must first accept their demands and then receive the money, threatening that they could leave the talks unless they reach an agreement.

"If GM does not accept our demands, KDB will not participate in a new share sale and plans to retrieve maturing currency forwards or loans," KDB chief Min Euoo-Sung said last week according to the aforementioned source.

GM Daewoo sold a total of 306,073 vehicles in the first seven months of 2009, with domestic sales in this period dropping 32.6 percent to 54,383 units from 80,719 from a year ago. Exports are down 49.8 percent year on year to 251,690 vehicles.

"While SUVs and large vehicles continue to face difficulties in the global marketplace, we have seen stronger demand globally for the Lacetti Premiere, GM Daewoo's new lower-medium sedan," said LaBelle, vice president of GM Daewoo Sales, Service and Marketing, back in August when the company officially announced its financial results.

"Additionally, the global market continues to demonstrate a strong interest in GM's all-new minicar, which will be launched in the domestic market in three weeks time, and exported to the world in the fourth quarter."