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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Desperate Race on the Spot

23 March, 1999 - 00:00

By Vitaly KNIAZHANSKY, The Day
Koreans demand changes in the AvtoZAZ-DAEWOO team, which in turn takes
General Motors as a companion.

On March 17, Zaporizhzhia saw festivities dedicated to putting into
production the ZAZ-1103, a new model of the Ukrainian Tavriya. No doubt,
the management of the joint venture knew how to demonstrate the plant conveyor,
operational again, and the upgraded version of the Ukrainian car. The only
and the most important question that bothered the witnesses of this historic
event, is how long this job can continue given the lack of solvent Ukrainian
buyers.

Meanwhile, two days earlier the AvtoZAZ-Daewoo Board of Directors gathered
again on the initiative of Oleksandr Sotnykov for the first time in a long
time, reports The Day's correspondent Viktor PUZHAICHEREDA
from Zaporizhzhia. The Chairman of the Board announced that the joint-venture
has a new full participant, General Motors, with which a series of working
protocols has been signed, some of them by the Korean party as well.

As the DAEWOO-Ukraine press service explained to our correspondent,
the Board of Directors has the right to take any action it wants. On the
other hand, the Korean party is not likely to waive its two demands: that
Sotnykov and his team be dismissed, and the joint venture's General Director
(the Korean party) be given two votes. The Koreans will agree to join the
new working group, created to solve existing problems, only if these preliminary
conditions are fulfilled.

The position of the Ukrainian government, voiced by the Deputy Prime
Minister Volodymyr Kuratchenko, can hardly be called readiness to compromise
either. According to Kuratchenko, "Mr. Sotnykov shares the position of
Ukraine and the enterprise," and his dismissal is out of the question.
In addition, Kuratchenko thinks that return of the $15 million previously
allocated to the joint venture (and now demanded by the Koreans) will strip
it of its working capital. However, according to explanations by the DAEWOO-Ukraine
press service, the Korean party is very surprised at such an approach and
is standing its ground.

In this stalemate, Price Waterhouse Coopers is developing a new business
plan. All our correspondent managed to find out from the planners is that
they had identified the market volume and the Zaporizhzhia joint-venture's
possible market share.

 

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