Examining a Business Failure
LDR/531 Organizational Leadership
I decided to research the Daewoo Motor America. Growing up my best friend’s first automobile was a Daewoo, and I had the joy of experiencing the ride first hand. We would ride this car from day to night, listening to the sound system and enjoying having a nice car to ride around in. Although the car was a great car the company seemed to having trouble, so I decided to research this company to find out what exactly happened to Daewoo Motors.
Daewoo America was incorporated in 1997 as a wholly owned subsidiary of Daewoo Motor Co., Ltd. (Daewoo Korea), a South Korean automobile manufacturer. Daewoo America served as the exclusive distributor of Daewoo automobiles in the United States and the exclusive provider of warranty services and replacement parts. On November 18, 1999, Daewoo Korea and Daewoo America entered into an Automobile Purchase and Distribution Agreement. Under the Agreement, Daewoo Korea agreed to sell to Daewoo America certain “Products” and granted to Daewoo America “the exclusive right to distribute, sell, rent, lease and otherwise dispose of, and service the Products in the United States. ("Auto evolution daewoo," 2008)
The deal did not include 15 plants, especially Daewoo's oldest plant in Bupyeong which now operates under the name Daewoo Incheon Motor Company as a supplier to GM Daewoo; General Motors plans to buy this plant by 2008. In February 2005, GM invested US$49 million to raise its share in the company to 48.2%. Furthermore, GM acquired 6.9 million shares in GM Daewoo for US$21 million from Suzuki Motors in August of the same year. General Motors' share in GM Daewoo then increased to 50.9%. Suzuki still holds 11% of GMDAT but is reported to be considering selling this to GM. ("Auto evolution daewoo," 2008)
On November 10, 2000,