Ford Pulls Out of Daewoo Motor Talks As Daewoo Faces False-Audit Charges
                    September 15, 2000

                    A WSJ.COM News Roundup

                    SEOUL, South Korea -- Ford Motor Co. said Friday that it has decided
                    to pull out of talks to acquire South Korea's ailing Daewoo Motor Co.

                    "We believe that a proposal was not possible that would be in the best
                    interest of Daewoo and Ford and their respective stakeholders," Ford
                    Vice Chairman W. Wayne Booker said in a statement issued in Seoul.

                    Daewoo Motor is being sold by creditors as part of the breakup of the
                    Daewoo Group.

                                         Separately, South Korea's Securities and
                                         Futures Commission, an arm of the Fair Trade
                                         Commission, said Friday that it has filed
                                         false-audit charges against 41 present and
                                         former employees of some Daewoo Group
                                         units, including Daewoo Motor. They are
                                         charged with violation of "outside auditing
                                         regulations," the SFC said. Those charged
                                         include the group's former chairman, Kim Woo
                                         Choong. Other units involved are Daewoo Corp.
                                         and Daewoo Heavy Industries Co.

                                         The auditing subsidiaries of the Daewoo Group
                                         companies were also punished, either with
                                         suspension of their businesses for 12 months
                                         or cancellation of licenses, the SFC said. The
                    total amount involved in the false auditing reached 22.9 trillion won
                    ($20.5 billion), including 14.6 trillion won for Daewoo Corp., the SFC

                    Hogen Oh, the chairman of the Daewoo restructuring committee, said in
                    a statement he regretted Ford's decision not to make a final bid and
                    added that the committee and Daewoo's creditors will come up with a
                    new plan to sell Daewoo Motor.

                    Lee Keun Young, chairman of South Korea's Financial Supervisory
                    Commission, said he expected the restructuring committee and the
                    creditors to decide on a new plan by Monday. He also hinted that the
                    two bidders who lost the June auction to Ford would have another
                    chance to bid for Daewoo without having to launch a new auction

                    Lee added that the creditors and restructuring committee would do
                    their best to complete the sale of Daewoo Motor by February, a
                    government-set deadline.

                    Ford's offer was better than those of General Motors Corp., which had
                    formed an alliance with Fiat SpA of Italy, and another alliance between
                    DaimlerChrysler AG and Hyundai Motor Co. of South Korea.

                    Earlier this week, a General Motors spokesman said the auto maker was
                    still interested in re-entering the Daewoo Motor picture should Ford walk
                    away from a deal. But GM hasn't sent a special team to South Korea or
                    otherwise taken its efforts out of mothballs, the company said.

                    The news comes as Ford grapples with a recall of 6.5 million tires by
                    Bridgestone/Firestone Inc., most of which were mounted on Ford
                    Explorers, because of reports that the tires' treads can peel off, causing
                    the Explorers to roll over. The tires are allegedly linked to 88 deaths and
                    more than 1,400 accidents in the U.S. over the past decade, plus at
                    least five more deaths since Bridgestone/Firestone began its recall Aug.

                    Ford's top negotiators had returned from South Korea to Ford
                    headquarters in Dearborn, Mich. last week for internal discussions
                    following two weeks of talks on a final agreement with the Daewoo
                    restructuring committee overseeing the sale of Daewoo Motor.

                    There had been reports from some individuals close to Ford to the
                    effect that, following its two months of due-diligence review,
                    management wanted to reduce the company's offer for the insolvent
                    South Korean auto maker to "somewhere around $5.5 billion." In June,
                    Ford was selected to enter exclusive talks on a purchase agreement by
                    bidding 7.7 trillion won ($6.93 billion), according to a South Korean
                    government official. Ford never confirmed that figure.

                    But officials on both sides had insisted late last week that the parties
                    weren't really that far apart. A spokesman for the Daewoo restructuring
                    committee said that while Ford hadn't yet officially named a price,
                    reports indicating Ford planned to shave its bid by $2 billion or more
                    weren't based on fact.

                    Ford spokeswoman Meera Kumar declined to say whether Ford had
                    wanted to lower its initial bid. "It's just that after a thorough review in
                    Daewoo Motor's operations abroad and here, we couldn't come up with
                    an offer that could satisfy both our shareholder and [Daewoo's]
                    creditors," Ms. Kumar said.

                    Ford had seen an acquisition of Daewoo as a chance to expand its
                    foothold in Asia's fast-growing market. But Ms. Kumar said Ford's
                    decision to abandon the Daewoo discussions wouldn't change the U.S.
                    group's overall plan to expand its operations in Asia. "The decision
                    hasn't made any change in our interest in Asia. We have other plans
                    than in Korea," she said, without elaborating.

                    South Korean President Kim Dae-jung had hoped that Ford's takeover
                    of Daewoo would boost foreign investor confidence in the South Korean
                    economy, which is undergoing restructuring following its recovery from
                    the Asian financial crisis. Daewoo Motor's troubles had been a huge
                    burden on South Korea's stretched financial institutions.

                    News of the failed Ford-Daewoo talks rattled South Korea's financial
                    markets. The Korea Composite Stock Price Index was down 21.94 or
                    3.4% at 628.20.