The warning underscores the government's resolve to proceed with its stepped-up restructuring of bloated businesses, despite fears that it could lead to massive layoffs. Two days later, the nation's third-largest auto firm was forced to shut down its main plant, with an annual production capacity of 500,000 cars, and applied for court receivership. Daewoo Motor, once a symbol of South Korea's business prowess, expanded facilities at home and abroad on a wave of bank borrowing in the 1990s. It is a major headache for the South Korean government, which is under pressure to energize its economy.
Experts say it's slumping because of a slowing pace of restructuring unprofitable businesses.
All workers will become jobless if their company fails and shuts down. But the union has refused to budge. Tens of thousands of workers held marches and rallies in Seoul and elsewhere in the past week. One protest in the capital turned violent, resulting in 100 people injured in clashes with police, according to police and workers. General Motors Corp. The American company has been negotiating to acquire Daewoo since September, when Ford Motor Co. abruptly pulled out of negotiations.