The Fall of Daewoo Motors

In 1976, Shinjin Motors faced financial problems and sold its 50% stake in Saehan to the Korea Development Bank (KDB). In 1978, the Daewoo Group acquired the equity stake and management rights from KDB. In 1982, Saehan owned a car assembly plant in Bupyong, a truck assembly plant in Pusan and a foundry at Inchon. In 1983, GM and the Daewoo Group agreed to rename their venture Daewoo Motor Company (Daewoo). In 1984, the partners decided to build additional assembly, stamping and engine facilities at Bupyong. The plants were dedicated to the production of a passenger car, Pontiac LeMans, based on the Opel Kadett platform. Production started in 1987 and about 50% of the cars were exported to the US and other international markets...

It was also reported that Kim had expanded Daewoo's global manufacturing capacities recklessly. He had established factories in Ukraine, Romania, Vietnam, and Uzbekistan with low investments and by making many false promises to the governments concerned. For example, in Poland, Daewoo acquired the government owned auto manufacturer by promising to invest $1.1 billion and to provide job opportunities for 20,000 workers. The company failed to fulfill its promises. The company was unable to fulfill its promises because it overestimated demand in these countries. In 1994, one year after Daewoo started assembling cars in Vietnam, the country's economy witnessed a recession, which led to a 30% reduction in the demand for cars...