GM Uses Off Shore Money to Bail out Daewoo

I found a good example (one of many) of how a regular business that was / is supposed to "produce" real products got so tied up with derivatives that the losses on the derivative bets alone have "bankrupt" the company.

GM rescued one such company in October with a cash injection of over $400 million. This from a company that has received billions of dollars in support by the American taxpayer. It is good to know that GM is only being audited by the Treasury for it's US operations isn't it? If they have $2 or $3 or $5 billion in the bank overseas, that just does not matter, they should only be shutting down the US operations without taxpayer help not overseas operations right? Keep them Koreans, Chinese, Indonesians, Brazilians or whoever employed cause for whatever reason, they can make money there, just not here in the US, the "previously" largest auto market in the world.

Yea, those poor folks at Daewoo (which was already 50.9% owned by GM) somehow managed to loose their "entire equity base", or lets say all of their cash / money / operating capital, you know, everything they need to pay bills with, by Won2,300bn of currency derivatives losses. That is nearly $2 Billion. What in God's name was an auto company doing with that kind of derivative exposure? With GM's 50.9% they basically "ran" the company right? Who the hell was running GM International operations at the time? Why wasn't he fired? Seems nobody was fired. Isn't that typical? Other major stake holders in Daewoo, Korea Development Bank, Shanghai Automotive of China and Suzuki had nothing to say. Hmm, well according the the FT article, Korea Development bank was Daewoo's largest lender. Think they were on the other side of that currency trade? This kind of information is just not available or talked about now is it?

What is almost comical is that Korea Development Bank (KDB) is asking for GM Daewoo to "share technology licenses for vehicles the jointly developer". Share with who? What the hell is that all about? China? I don't think KDB is going into the auto business any time soon, or do they own a substantial stake in some Chinese auto firm and want the technology to make cars in China? This is all a big mess. For Daewoo's largest creditor to make demands that are contrary to the interest in the company they own the stake in just does not make sense.

I still want to know what Daewoo was doing with Currency Derivative exposure that would allow them to loose $2 Billion and I want to know who bankrolled the trade and who was on the other side and why weren't a bunch of people fired?

Not much to ask...