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Awasthi steps down as Daewoo chairman

Daewoo Motors India Limited chairman Shiv Gopal Awasthi on Monday announced his resignation. The company's deputy managing director B S Min is also leaving for South Korea by November 3.

''I have been associated with the automotive industry for 16 long years and finally put in my papers on Saturday,'' Awasthi said.

Regarding the reasons for stepping down, Awasthi said, ''I have not been adding value to the critical decision-making process of the company any longer. These decision are critical to the fate of any company and I was not associated with the process any longer."

''I have been here for a long time and was instrumental in establishing the joint venture between DCM Limited and Daewoo Motors. I have accomplished my task of proper establishment of the venture in India. Now, I have to move on,'' he added.

Min, when contacted, said that he will be serving the Indian operations of Daewoo till end of October. ''I will be leaving for Seoul by November 3,'' he said.

Daewoo Motors India has already undertaken a restructuring exercise under which its 2,300-strong workforce is being trimmed by 15 per cent. In addition, the number of Korean executives in India are also being reduced as an attempt to reduce costs and right-size the organisation.

Daewoo is simultaneously studying the impact of this exercise on the cost structure and trying to minimise the hike in prices of its popular small car Matiz, DMIL managing director Young-Chang Kim had said earlier.

The reduction, however, doesn't cover floor workers. The company is reducing the number of divisions within the company from seven to five and the number of departments from 22 to 15, he added. The number of Korean executives has come down to the current level of 11 from 46 in 1997.

''Our cost reduction targets on account of various activities of Parivartan amounts to Rs 610 million and workforce reduction is only a minuscule part of it,'' he added.

These efforts are as part of attempts minimise the hike in car prices. The rupee impact has put a pressure of Rs 520 million and the component prices have gone up by Rs 50 million. ''We are trying to hold the prices of Matiz with this restructuring exercise.''

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