Daewoo

Daewoo (UK: /ˈdeɪ.uː/ DAY-oo; US: /ˌdeɪˈwuː/ day-WOO; Korean: 대우; Hanja: 大宇; IPA: [tɛ.u]; lit. "great universe" and a portmanteau of "dae" meaning great, and the given name of founder and chairman Kim Woo-choong) also known as the Daewoo Group, was a major South Korean chaebol (type of conglomerate) and automobile manufacturer.

It was founded on 22 March 1967 as Daewoo Industrial and was declared bankrupt on 1 November 1999, with debts of about US$50 billion (equivalent to $94 billion in 2024). Prior to the 1997 Asian financial crisis, Daewoo was the third largest conglomerate in South Korea, behind the Hyundai Group and Lucky-Goldstar (later became LG Corporation). There were about 20 divisions under the Daewoo Group, some of which survived as independent companies.

The Daewoo Group was founded by Kim Woo-choong in March 1967. He was the son of the Provincial Governor of Daegu. He graduated from the Kyunggi High School, then finished with an Economics Degree at Yonsei University in Seoul.^[when?]

During the 1960s, after the end of the Syngman Rhee government, the new government of Park Chung Hee intervened to promote growth and development in the country. It increased access to resources, promoted exports, financed industrialization, and provided protection from competition to the chaebol in exchange for a company's political support. In the beginning, the Korean government instigated a series of five-year plans under which the chaebol were required to achieve a number of basic objectives.

Daewoo did not become a major player until the second five-year plan. Daewoo benefited from government-sponsored cheap loans based on potential export profits. The company initially concentrated on labor-intensive clothing and textile industries that provided high profit margins because of South Korea's large and relatively inexpensive workforce.

The third and fourth of the five-year plans occurred from 1973 to 1981. During this period, the country's labor force was in high demand. Competition from other countries began eroding South Korea's competitive edge. The government responded to this change by concentrating its efforts on mechanical and electrical engineering, shipbuilding, petrochemicals, construction, and military initiatives. At the end of this period, the government forced Daewoo into shipbuilding. Kim was reluctant to enter this industry, but Daewoo soon earned a reputation for producing competitively priced ships and oil rigs.

During the next decade, the Korean government became more liberal in its economic policies. Small private companies were encouraged, protectionist import restrictions were loosened, and the government reduced positive discrimination (affirmative action), to encourage free market trade and to force the chaebol to be more aggressive abroad. Daewoo responded by establishing a number of joint ventures with U.S. and European companies. It expanded exports of machine tools, defense products (under the S&T Daewoo company), aerospace interests, and semiconductor design and manufacturing. Eventually, it began to build civilian helicopters and airplanes, priced considerably cheaper than those produced by its U.S. counterparts. It also expanded efforts in the automotive industry and was ranked as the seventh largest car exporter and the sixth largest car manufacturer in the world. Throughout this period, Daewoo experienced great success at turning around faltering companies in South Korea.

In the 1980s and early 1990s, the Daewoo Group also produced consumer electronics, computers, telecommunications products, construction equipment, buildings, and musical instruments.