Daewoo Insists it’s Here to Stay
Responding to recent accounts of financial troubles at Daewoo Motor Co., Seoul, South Korea, an executive with the firm’s American subsidiary told the Advance early last week that visions of doom are ill-founded.
“Daewoo is not going anywhere,” insisted Gary Connelly, senior vice president of marketing for Daewoo Motor America. “No matter what happens, the Daewoo franchise will continue as a brand name in the U.S.” The labor union of the South Korean auto maker said yesterday that thousands of its members will begin a new strike next week to protest management’s layoff plans.
Management announced in December that it would lay off 5,500 workers by Feb. 16 to improve the terms of the company’s possible sale to General Motors Corp., which is reportedly reluctant to proceed with the negotiations without layoffs.
The auto maker, which has 18 manufacturing plants worldwide and a sales presence in over 180 countries, was first introduced in the United States in 1999. Debuting here with 15 company-owned stores, the operation now has over 500 retail dealerships across the nation including Villa Marin Daewoo in Mariners Harbor.
Speaking from his Compton Calif., office, Connelly said ongoing reports of the South Korean auto maker being in bankruptcy are untrue.
“It is not … a state of bankruptcy,” he said. “(The situation) is totally different from what the United States calls a Chapter 7 or a Chapter 11.”
Describing the status as a “reorganization,” Connelly said the manufacturer is functioning under “court receivership,” with the South Korean government funding and managing the operation. Even the term “receivership” carries a much different meaning in South Korea than it does in the United States, he said.
“The government has pretty much guaranteed the company will not go under,” Connelly affirmed. Noting that General Motors Corp. and others have shown interest in purchasing the South Korean outfit, he added, “If price expectations are not met, the government will continue to operate the company.” Receivership here is starkly different from the legal condition that Connelly says exists in South Korea.
“In New York state, a receivership is created to benefit an individual creditor who has brought a judgment against an individual or a company and is trying to enforce the judgment,” explained attorney Paul Hollender of Corash & Hollender, West Brighton.
Adjustments taking place at the South Korean company are seen by Villa Marin Daewoo as being positive, with little consequence for the Island franchise.
“It means business as usual to me,” said Al Lambert, general manager of the dealership. “There has been no effect because nothing has changed in terms of the quality of the product, the manufacturer’s managerial procedures or the way the company is treating us.”
However, Lambert noted, misinterpretations regarding the South Korean operation need to be addressed and he often spends time enlightening customers on the auto maker’s true state of affairs.
“The only thing that has changed is that during my explanation of the vehicle, I spend a few moments explaining the solidness and the continuity of the company,” Lambert said.
The local Daewoo site is one of three Island showrooms owned and run by Villa Marin, including its Pontiac, Buick, GMC operation on Hylan Boulevard in New Dorp, and its main truck center on Richmond Terrace, Mariners Harbor.
Voicing an air of optimism, Lambert stated, “If quality is the consumer’s vision of the future, then this car is going to be big.”
Last month, the American subsidiary selected PRIMUS Financial Services, a division of Ford Motor Credit Co., as its “source of choice.” The Franklin, Tenn.,-based firm has already begun offering special financing programs to Daewoo buyers.
“With 2000 sales up over 122 percent from 1999 and a goal of 120,000 sales for calendar year 2001, joining forces with PRIMUS was a natural progression for Daewoo,” said D.J. Lee, president and CEO of Daewoo Motor America.
(Associated Press material was used in this report.)
SUB 3 earn title
Three Staten Island-based Allstate life insurance specialists have recently earned the title of “personal financial representative.”
Henry Vitiello, of Allstate’s Rossville office, and John Tarangelo and Austin Trabulsy, both of the Bloomfield office, received the distinction after passing the appropriate securities license exams and completing an extensive Allstate training program.
In addition to traditional life insurance offerings, the three are now able to provide their clients with variable annuity, variable life and mutual fund products.
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