Daewoo's uncertain future is driving dealers to distraction

As Suzuki Motor Corp. announced plans to invest in GM Daewoo Auto & Technology Co. yesterday, Daewoo dealers in the Puget Sound area said that they're still struggling to get their customers' cars serviced promptly.

Though GM Daewoo will buy certain assets of Daewoo Motor Co., which filed for bankruptcy in 2000, those assets do not include Daewoo's U.S. subsidiary, Daewoo Motor America.

The result, local Daewoo dealers said yesterday, is a lot of uncertainty for Daewoo owners.


	Dana McGiboney, office manager for Three Sisters Nelson Chevrolet in Ballard, stands with a leftover Daewoo and the symbolic weeds that have grown up around it. Phil H. Webber / Seattle Post-Intelligencer Click for larger photo

"I can't imagine being an owner of one of these cars," said Kerry Bivens, general manager of Daewoo of Puyallup.

Until the deal -- expected to close later this summer -- is complete, Daewoo and Daewoo Motor America are responsible for warranty repairs on the cars, General Motors said.

And while dealers say that they're doing the warranty work, some said yesterday that it's difficult to get parts.

"The parts are moving slowly," said Buzz Rodland, whose Everett Toyota dealership also sells Daewoos. "It's not business as usual."

A spokesman for Daewoo Motor America at the company's Compton, Calif., headquarters said yesterday that supply problems should "ease up" in the next few weeks because the company has received new shipments.

As the dealers struggle to make good on the warranties, at least one said yesterday that he's suffering more than his customers.

Steve Hanson, whose Hanson Motors in Olympia has sold Daewoos for about two years, said that he's incurred major losses.

"The customers are going to be perfectly intact," Hanson said. "Their warranties are going to be honored. But the impact to us is that we're out every dime that we invested."

While some local Daewoo dealers, like Rodland, are continuing to sell the cars, others say that they've stopped selling them.

At the Three Sisters Nelson Chevrolet lot in Ballard, which shut down in March, weeds have sprung up around the few remaining Daewoos.

And Bevins, the general manager for the Puyallup dealership, said she is going to hold off on selling her remaining inventory until the GM Daewoo deal closes and the future of the cars becomes more certain.

Yesterday a General Motors spokesman said that the company's newly formed Daewoo business plans to continue making and selling the cars in markets around the world.

"One of those markets is likely to be the United States, but we have not made any decision yet about how the vehicles will be branded or sold or distributed," said Jerry Dubrowski, a General Motors spokesman.

General Motors announced the creation of GM Daewoo in April. General Motors has said that it intends to invest $251 million in cash in the company, for a 42 percent stake. Other investors include creditors of the bankrupt Daewoo Motor Co. and General Motors partners. Suzuki did not provide any financial details of its investment yesterday.

After GM Daewoo closes its deal, warranty claims will be paid out of a special trust fund set up as part of an agreement between General Motors, its partners and Daewoo's creditors.

General Motors itself, however, will not assume responsibility for those warranties, he said.

But as the Daewoo deal nears completion, local dealers expressed skepticism -- and frustration.

At least two local dealers have joined a class-action lawsuit against General Motors.

Rodland, who is part of that suit, said that after the General Motors-backed deal is complete, he will be forced to shut down the Daewoo branch of his dealership.

"General Motors is taking the product away from us," he said. "It seemed like Daewoo had a real, long future in this country, but they had some insurmountable problems."

This report includes material from Bloomberg News. P-I reporter Marni Leff can be reached at 206-448-8142 or marnileff@seattlepi.com

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