By Seonjin Cha

Nov. 12 (Bloomberg) -- <U>GM Daewoo Auto & Technology Co</U>., General Motors Corp.\'s South Korean unit, plans to idle factories next month as the global credit freeze cuts vehicle demand worldwide, according to the carmaker\'s union.

``Because of falling exports, we\'re discussing the schedule for factory suspensions,\'\' Kim Yun Bog, a spokesman for GM Daewoo\'s labor union said by phone today in Incheon, where the carmaker is based. ``Operations will likely be suspended from 10 days to about a month around the end of December.\'\'

The suspension of Korean factories, the first since GM acquired bankrupt Daewoo Motor Co. in 2002, comes as the largest U.S. automaker is seeking government emergency aid. GM Daewoo, which makes about 20 percent of vehicles sold by <U>GM</U> worldwide, may stop building Tosca midsize sedans and Winstorm sport- utility vehicles for about a month while production of smaller cars may be halted for about 10 days, the union spokesman said.

``GM Daewoo is GM\'s production base for small cars, whose demand is growing,\'\' said <U>Stephen Ahn</U>, the head of research at Seoul-based LIG Investment & Securities Co. ``This is a side effect of the <U>cash</U> shortage. Even maintaining inventories costs money and GM can\'t afford that now.\'\'

GM Daewoo is reviewing options and hasn\'t yet completed its production schedule, spokesman Kim Sung Soo said.

Government Help

GM, Ford Motor Co. and Chrysler LLC are seeking $50 billion in loans from the U.S. government, people familiar with the matter have said. That would be on top of $25 billion in low- interest borrowing Congress approved in September to help retool plants to build more-efficient vehicles. Some investors have said GM should reorganize in bankruptcy.

``We\'re not even looking at that as an option, it\'s not even being considered,\'\' GM Daewoo spokesman <U>Jay Cooney</U> said by phone today. ``We are not making any contingency plans. Our plan is to be in Korea as a healthy company for a long, long time.\'\'

GM Daewoo\'s dependence on its parent for overseas sales will make it vulnerable if GM faces bankruptcy, analysts said.

``GM can\'t let go of GM Daewoo, which is a cash cow and is in charge of its global mini and subcompact vehicle development,\'\' Lee Jin Shik, an automotive analyst at CSM Worldwide Inc. said by phone in Seoul. ``As GM Daewoo relies entirely on GM for its overseas sales network and has small domestic share, it\'ll be hard to survive on its own.\'\'

GM Daewoo, which plans to produce 2 million vehicles this year including shipment in kit forms, exports more than 90 percent of vehicles out of Korea under various GM brand including Chevrolet and Buick. It took 10 percent of South Korean market in the first nine months of this year, according to <U>Korea Automobile Manufacturers\' Association</U>.

The unit\'s dependency on exports makes it less attractive as acquisition target by local competitors such as Hyundai Motor Co., the nation\'s biggest automaker, analysts say.

``There\'s no synergy Hyundai can expect by purchasing GM Daewoo, which is purely a production base for GM,\'\' said <U>Choi Dae Sik</U>, an analyst at HI Investment & Securities Co. ``I suspect no major Asian automaker would have interest in buying GM Daewoo.\'\'