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| June 30, 2000 | atimes.com | ||
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The Koreas
Ford chosen as sole bidder for Daewoo Motor SEOUL - Price counted most to Daewoo Motor's bidding committee in choosing Ford as the sole priority bidder over the Hyundai-DaimlerChrysler and General Motors-Fiat consortiums. According to the Daewoo Restructuring Committee, Ford bid 7.7 trillion won (US$6.9 billion), trouncing the offers from Hyundai-DaimlerChrysler and GM-Fiat, 5-6 trillion won and 4 trillion won, respectively. After submitting its proposal, Ford had expressed its confidence of winning the bid, saying its proposal was competitive in price and content. Hyundai-DaimlerChrysler had also claimed to have put up the highest offer, showing it had no idea Ford would go as high as it did. Though the offer in the proposal isn't legally binding, Ford will not be able to reduce the final price to any large extent because that would violate common business practice, industry sources predicted. ''The price wasn't the only factor in Ford's favor, but it definitely weighed a lot on our minds,'' a committee official said. Ford, he said, presented better conditions than the other contenders in respect to technology transfer, maintenance of current employees and price. Ford thus will project a good image to employees of Daewoo Motor and the people as well, he said. Hyundai-DaimlerChrysler's less aggressive attitude also must have affected the decision, a source added. The DaimlerChrysler chairman's interview with a German paper Tuesday gave the impression his company was not very interested in taking over the troubled automaker. The Korean-American-German consortium contrasted with the other two competitors in its passive attitude toward examining the troubled motor company, according to the the bidding committee. Ford, on the other hand, repeatedly stressed that it was not trying to acquire Daewoo Motor but to forge a strategic alliance with it; that must have struck a chord with committee members. Before the final winner is named in September, Ford has six weeks to complete its second-stage examination of Daewoo's auto facilities and books. The bidding committee and Ford will meet in early July to discuss the itinerary and most likely exchange a memorandum of understanding. With the bidding over, one of Korea's biggest headaches can start to subside, and the South Korean economy is expected to profit directly and indirectly from the imminent sale. When Daewoo Group fell last year with debts of 90 trillion won (US$80.7 billion), the nation's economy received a heavy blow at the very time it had just started to crawl out of the foreign exchange crisis. To this day, it is still reeling from the effects. Out of Daewoo's total debts, Daewoo Motor took up the biggest share with 31 trillion won in losses. The success of Daewoo Motor's sell-off so far is expected to accelerate the overseas sales or spin-offs of Daewoo affiliates - Daewoo Corp (KSE:03810), Daewoo Heavy Industries (KSE:00200) and Daewoo Electronics (KSE:07410) - picking up the pace of the debt workout. In a broader perspective, the government anticipates the high-priced bid will contribute to elevating the nation's credibility. A Finance and Economy Ministry official said: ''With the selection of a foreign auto maker as a bidder, the nation made it clear that it does not discriminate against foreign businesses. (Asia Pulse/Yonhap) |
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