Daewoo to continue warranty work, braces for Chapter 11
Compiled by the staff of: WARD'S AUTOMOTIVE REPORTS Ward's AutoWorld, Jun 1, 2002 12:00 PM

Contrary to reports, Daewoo Motor America Inc. hasn't run out of parts or closed the doors of its two North American warehouses, says Gary Connelly, head of the South Korean auto maker's U.S. arm. General Motors Corp. purchased some of the assets of insolvent Daewoo Motor Co. Ltd., but U.S. operations were not included in the deal. The U.S. subsidiary has filed for bankruptcy, but plans to honor its commitments. Daewoo Motor America still is receiving parts, and Connelly expects the company will be able to fully honor the 3-year, 36,000-mile (58,000-km) warranty on all cars sold here. In the interim, dealers have been paid out-of-pocket for recent warranty work, and Connelly also says he will try to compensate dealers for incentives paid out over the last few months. The money to do so isn't there right now, but Connelly says he may be able to earn back a large enough sum as the auto maker sells off the rest of its U.S. inventory. There are some 8,000 Daewoo cars “sitting at the docks” waiting to be sold in the U.S. Connelly expects the U.S. staff, which peaked at 300 and dwindled to 60, will hover around 40 through the summer when the Daewoo-GM transition is expected to be complete. The warehouses will stay open for about three years — until Daewoo warranties in the U.S. come to term, he says.