GM's Daewoo Calls for Financial Aid

With the recession still making victims among global automakers, more and more companies decide to ask for support from their local governments, explaining that financial aid is absolutely mandatory in order to preserve jobs. General Motors' South Korean brand Daewoo recently called for support from the local authorities, but no official decision has been issued yet. However, some rumors are already claiming the South Korean government rejected the request despite the fact that it currently has no plan to help the automotive industry.

Michael Grimaldi, CEO of GM Daewoo Auto & Technology Co, met government minister Lee Youn-ho, who is currently responsible South Korea's automotive sector, Autonews wrote today. A Daewoo spokesman confirmed the report and added that the "liquidity support in the longer term would help the company's management, although we do not need that imminently.”

According to Autonews, ministry officials clearly stated that parent company General Motors has to file a restructuring plans and submit its intentions to help the South Korean brand before applying for financial support. Daewoo is currently the third largest automaker in the country and one of the first companies to ask for support, including financial aid.

As you can see, General Motors is continuously running for cash, with loan requirements applied in various regions of the world, including United States and Canada. The American government last December agreed to provide a $17.4 billion loan to General Motors and Chrysler, with both companies required to send a restructuring plan by February 17 and demonstrate their viability by the end of March.

GM Daewoo was officially purchased in 2001 when the American automaker decided to buy the majority stake of the South Korean company and rename it from Daewoo Motors to its current name.