Daewoo suspend supplies, claim reports

Daewoo Motor contractors have decided to suspend supplies of automobile components to the carmaker from Thursday due to the company's failure to pay suppliers for the parts, local newspapers reported, citing suppliers' representatives.

The Korea Economic Daily quoted Um Ki-hwa, a representative of parts suppliers, as saying, "We had to decide to suspend parts (supply) because our demand for settlement of parts supplies has not been met."

He said most parts suppliers are suffering from severe cashflow problems due to the delay in payments.

If not resolved soon, the planned suspension of parts supply is expected to force Daewoo Motor to halt its production and may affect the carmaker's plan to launch the new GM-Daewoo Auto Technology Co in early October, the report said.