A WSJ.COM News Roundup

                    SEOUL, South Korea -- Creditors of the long-ailing Daewoo Motor Co.
                    said the automaker officially declared bankruptcy Wednesday after its
                    hard-boiled labor union rejected a restructuring plan calling for layoffs.

                    The decision threatened to choke off operations at Daewoo Motor. Kim
                    Jong Do, director of corporate communications at Daewoo Motor, said
                    the company would work with creditors to try to keep production
                    running normally, and that management would strive to avoid damage
                    to customers. However, he also said the car maker has enough
                    components to keep operating for only about a month.

                    "The union has refused to submit its consent to the restructuring plan.
                    We can't wait any longer. Daewoo's bankruptcy has become formal,"
                    said Yang Mun-suk, a spokesman for Daewoo's main creditor, Korea
                    Development Bank.

                    Meanwhile, South Korean government officials
                    will meet Thursday to discuss ways of extending
                    financial aid to Daewoo's suppliers and other
                    related companies, the Financial Supervisory
                    Service said Wednesday.

                    The union's rejection of the restructuring plan is
                    expected to leave creditors at a disadvantage as
                    they try to sell Daewoo to General Motors Corp.

                    A spokesman for GM said the No. 1 car maker is
                    "still studying the situation to determine what
                    the implications are, and until then it would be
                    inappropriate for us to comment'' on the new
                    developments.

                    Daewoo Motor, which has two million units of
                    annual production capacity, had been sought
                    after as a key strategic acquisition in the fast-growing Asian car market,
                    but now creditors have likely been left with only GM and Fiat as viable
                    partners. Delays in completing a sale have contributed to a deterioration
                    of Daewoo Motor's operations, and the company has already had to
                    shut down a production line in Korea and idle a Poland factory.

                    A spokesman at Korea Development Bank, a major creditor of Daewoo
                    Motor, said the company would face bankruptcy proceedings, after talks
                    between the company's management and union failed to produce an
                    accord on layoffs.

                    The company defaulted on its commercial paper on Monday and
                    Tuesday. Creditors have been withholding new funds from Daewoo
                    Motor since September, and demanded a reform plan before providing
                    any further financing. The union, however, refused to budge after hours
                    of negotiations. A union official on Wednesday said workers wouldn't
                    submit to large-scale layoffs, even if the company faced bankruptcy.
                    Last week, Daewoo Motor said it intended to lay off about 18% of its
                    staff, but the union rejected the plan.

                    Daewoo Motor has been one of the country's longest-running corporate
                    problems. The auto maker was put into a special debt-restructuring
                    program in November 1999, but attempts to revive the company have
                    been hampered by delays in selling it to a foreign car maker. In
                    September, Ford decided not to submit a final offer to buy the
                    company, even though it was selected as a preferred bidder in a June
                    auction.

                    Daewoo Motor is a member of the Daewoo Group, which creditors
                    decided to dismantle in August 1999 after it amassed more than 89
                    trillion won ($78.2 billion) in liabilities. Daewoo Motor's total debt as of
                    June 2000 was 18 trillion won.

                    The situation at Daewoo Motor represents a new, tougher stand by the
                    banks to stop pouring money into the country's weakest companies,
                    and the banks' actions threaten to put strain on other debt-heavy
                    companies. Daewoo Motor may also face problems maintaining its
                    far-flung international operations, which include manufacturing plants in
                    Poland, Uzbekistan and India. Daewoo Motor's woes are a result of
                    aggressive, debt-financed expansion plans into risky emerging markets.

                    Creditors said the next expected step is to put the company under
                    court receivership -- a process that will install new management and
                    freeze all debts.

                    --Wall Street Journal Reporter Michael Schuman contributed to this
                    article.