The Dangers Of Cracking Down In Korea

A hard line on the chaebol could cost millions of jobs

When state-backed Korean banks declared Daewoo Motor Co. bankrupt in early November, the move was deemed harsh but necessary medicine. Among other things, receivership could give court-appointed managers the power to lay off a fifth of Daewoo Motor's workers--thereby making the ailing auto maker more attractive to foreign buyers like General Motors Corp. and Fiat, as well as giving Daewoo Motor's remaining employees a chance to keep their jobs.

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