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INCHON, South Korea -- GM Daewoo Motor & Technology Co. announced plans Thursday to spend nearly $1.5 billion in production investments and add up to 1,000 new jobs to its South Korean business over the next several years.

The plans include a new diesel engine plant and an overhaul of its factory in Bupyung to fill the SUV and luxury car holes in GM Daewoo's lineup, which consists mostly of small cars. The SUV is planned for release in early 2006 and the luxury car for 2007.

For General Motors Corp., the plans represents one of the linchpins in its Asian strategy.

South Korea ranks as one of the world's 10 largest -- and one of the most difficult to enter -- automotive markets with 2003 unit sales of 1.3 million cars and light trucks. It sits between China's burgeoning auto segment and the long-established Japanese market.

A GM-led joint venture purchased the shell of bankrupt Daewoo Motor Co. in 2002, following a protracted struggle with unions and creditors. Daewoo's four years prior to the merger were spent in bankruptcy court while its unions protested foreign ownership bids. Unpaid suppliers at one point stopped shipments. The public didn't want to buy cars from a company that soon might not exist.

But since the merger, GM Daewoo has increased its market share in the segments in which it competes.

Few people question that Daewoo, Korea's third-largest automaker behind Hyundai and Kia Motors, is now better off. But the company's image has been badly damaged. A South Korea recession exacerbated by a national credit card debt crisis has made it difficult for GM Daewoo to regain lost business.

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