The headquarters of GM in Detroit said on Tuesday it will start producing the Lacetti Premiere compact in the U.S. from April next year. The vehicle was developed and first manufactured by GM Daewoo, the Korean unit of the U.S. carmaker. Since its release in November of last year, GM Daewoo has rolled out 370,000 Lacetti Premieres, including 330,000 exported to Europe, China and other foreign markets, with the model becoming the driving force in the company's rising sales. GM intends to produce the car in the U.S., boost annual output and sell them in North America and Europe. It is taking away the crown jewel of its Korean unit.

As it became increasingly difficult to operate the Korean unit amid the global downturn early this year, GM asked the state-run Korea Development Bank (KDB) for a capital injection and additional loans for GM Daewoo. KDB, which is GM Daewoo's second-largest shareholder, demanded that GM give the Korean unit the rights to vehicle technologies it develops and guarantee at least five year's worth of production orders. GM rejected those demands and decided to pursue a capital injection on its own. Now it is about to take away the unit's most profitable model.

When its Opel division faced bankruptcy, GM asked the German government for financial aid. The German government provided the U.S. company with 4.5 billion euros in support after it pledged to sell the unit after reviving it to prevent mass layoffs. But once economic conditions improved, it decided not to sell Opel.

After being acquired by GM in 2002, GM Daewoo has not received any new investments from its parent nor developed any new models other than the Lacetti Premiere. Over the last few months it has been working to cut its research and development staff by urging them to apply for early retirement. If GM had truly intended to bolster GM Daewoo's operations, it would not have done things this way. If GM Daewoo loses its role as a production base for compacts and subcompacts, its future will be bleak and GM will end up wasting the Korean unit's brand value.