GM to invest US$6b in Daewoo unit
Posted: 25 July 2007 0630 hrs

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DETROIT, Michigan : General Motors plans to invest more than US$6 billion in its Daewoo Automotive Technology subsidiary (GM DAT) in South Korea over the next four years, a GM executive said Tuesday.

Michael Grimaldi, president and chief executive of GM DAT, which is based near Seoul, said the giant automaker considers Daewoo one of its major export platforms now and in the future.

"Strategically it's important for GM," Grimaldi told a meeting of the Detroit Society of Automotive Analysts.

GM has given DAT the task of engineering new small vehicles in the mini and subcompact class, Grimaldi said.

"We have tremendous strength at GM Daewoo. We're taking business away from Hyundai and Kia. Our export business is huge. We are GM's major export base now for many of the developing countries," he said.

"We're investing more resources in both design as well as our engineering organisation. We're looking forward to the introduction of our new mini and small cars that will come to markets around the world in the next several years," he said.

"We do believe that in combination with General Motors, GM Daewoo is contributing to GM's growth and going forward will continue to play an increasing strategic role."

GM Daewoo now operates an engineering centre in Inchon, Korea, which will expand to accommodate more than 2,500 engineers and will open a new proving ground and test centre near its Seoul area headquarters, Grimaldi added.

The expansion of Daewoo, which was bankrupt at the beginning of the decade, also includes an expansion of the company's manufacturing base as part of the six-billion-dollar investment for new plants and new products.

Grimaldi, who formerly headed GM's operation in Canada before moving to Asia, also minimised the significance of recent work stoppages at the company's manufacturing centre.

The walkouts were very brief compared with other labour disputes in South Korean auto plants and the company has now signed a new one-year labour pact.

"Our labor relations has effectively been a competitive advantage," said Grimaldi, who added South Korea can no longer be considered a low-wage country. - AFP/ch