Daewoo Motors chairman submits resignation

By , agencyfaqs! | In
Last updated : September 25, 2014 04:04 PM
S.G. Awasthi, chairman of Daewoo Motors India, put in his papers on Saturday, marking the end of his 16-year association with the company

Prachi Joshi Johar
agencyfaqs! News Bureau
NEW DELHI, October 17

Daewoo Motors India Ltd (DMIL) chairman, S.G. Awasthi, put in his papers on Saturday, marking the end of his 16-year association with the company. While Awasthi was unavailable for comment, his long-term associate Suhel Seth, who heads advertising agency Equus, said that this move was long overdue.

Difference between his style of functioning and the way the Korean chaebol was being managed has been cited as the primary reason behind his resignation. Sources close to the company said that the initial pricing of Cielo and Matiz had first led to differences between Awasthi and his Korean counterparts. The prices of both these cars had to be revised downwards sometime after the launch. This apart, when the decision making powers were vested with the Korean MD, Young-Chang Kim, Awasthi felt that his role as chairman was further diluted.

A source close to Awasthi, Daewoo and Equus revealed that for the past two years, there has been a "deliberate attempt" by the Koreans to alienate Awasthi. This source was candid enough to add, "I've sat in a strategy meeting with Awasthi and the Korean managers, when the latter would slip into consulting each other in Korean leaving Awasthi and me in the dark."

When contacted, Daewoo officials declined to comment but confirmed Awasthi's resignation. Industry observers, however, pointed out that Awasthi's exit was linked with the corporate restructuring at Daewoo Motors. The company plans to cut down its workforce by around 15 per cent. While Awasthi has not revealed his plans, he told newsmen that he has made up his mind about his future course of action.

Awasthi had joined DCM-Toyota in 1984 and hung on with the company as it changed to DCM-Daewoo and then Daewoo Motors India later. Daewoo's projected turnover for 2000-01 is Rs 2,500 crore. Daewoo had earlier announced an ambitious sales target of 80,000 cars for the current fiscal. The company's turnover for 1999-2000 stood at Rs 1,300 crore with sales figure totalling 40,000 cars.

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First Published : September 25, 2014 04:04 PM

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