Daewoo Motor goes to auction SEOUL - South Korean banks decide to leave the fate of Daewoo Motor Co. Ltd., with debts of $16.4 billion, to the whim of the auction block. The decision to put the troubled automaker up for bids ends General Motors Corp.'s exclusive bargaining and opens the door to competitors. GM had requested exclusive negotiating rights, but creditors reportedly view GM's bids, said to be between $5.3 billion to $6.2 billion,as too low. The most aggressive competing bidder is Ford Motor Co., which has sent a delegation to Korea in an effort to assess the automaker. Daewoo Motor, along with other Daewoo Group subsidiaries, was put in the hands of creditors in August 1999 as part of a debt workout program. Daewoo Motor would provide a winning foreign bidder entry to the protected Korean market, as well as access to Asia and Eastern Europe, where Daewoo has plants. The Korea Development Bank has set a mid-March deadline for choosing a preferred bidder.
Japan new-car sales slide to 15-year low Japan's auto sales round out a flat year on a weak note, but analysts predict demand to rebound in 2000. Auto sales posted a decline for December 1999, down 1.8% from year-ago. The drop follows a 0.2% rise in November, which, though modest, broke a 32-month sales slide that began in April 1997. Sales of new motor vehicles totaled 294,397 in December, compared with 299,846 in December '98. Among Japan's five leading automakers, Toyota Motor Corp., Nissan Motor Co. Ltd. and Mitsubishi Motors Corp. suffered sales losses, while Mazda Motor Corp. and Honda Motor Co. Ltd. saw a rise in sales. Mazda sales leaped 18% to 19,962. Overall for 1999, new vehicle sales fell 8% to 3.99 million units, the lowest level since 1984, reports the Japan Automobile Dealers Assn.
VW expects slow recovery in Latin America SAO PAULO - After five years of continued profits in Brazil, Volkswagen AG announces it will record a loss for 1999 despite revenues of $6.8 billion in the region, which represents a 15% drop from prior year. VW also plans to reduce its payroll by 2,000 workers this year, in most cases as part of voluntary resignation plans that provide special benefits to quit. VW do Brasil boss Herbert Demel says the profit loss is due to an 18% drop in sales. Some 65% of VW cars were entry-level vehicles with low sticker prices and low-profit margins. Demel projects an 8% increase in sales this year due to estimated improvements in the economy. The company expects a 3% to 4% rise in Brazil's GDP, while exports are expected to increase from 50,000 to 65,000.
Mitsubishi confirms expected job cuts ADELAIDE - Mitsubishi Motors Australia confirms it plans more job cuts at its two Adelaide plants, but is not saying how many. Managing Director Mike Quinn says costs have to be brought down. The job losses will be part of a long-term program to improve efficiency at the plants, which employ about 4,200 people. "Retrenchment is always a potential," Mr. Quinn says, "but our aim at present is to run it on a voluntary retirement program and on attrition." A Mitsubishi Australia spokesman says the parent company's budget meetings in Japan will set future production levels and cost cutting. "They have said to us that we need to get our costs to a position where we break even or don't lose money," he says. Mitsubishi already has said it will concentrate its resources in Japan, North America and Asia under a three-year restructuring plan. The Australian Mfg. Workers' Union says Mitsubishi is being hurt by a buyers' strike in advance of the introduction of a new 10% goods and services tax (GST), which kicks in July 1, that has the company producing 170 cars a day but selling only 80 to 90. The tax will cut car prices by an average 6%, because it replaces a 22% wholesale sales tax.