SEOUL, South Korea (AP) _ South Korea's troubled Daewoo group signed a memorandum of understanding with General Motors Corp. of the United States Friday to form an alliance in auto manufacturing.

The memorandum was the first step in joint efforts by the two sides to form an alliance specifically targeted for car business, and further details have yet to be worked out, Daewoo and GM officials said.

Cash-strapped Daewoo hopes the alliance would lead to fresh capital investment from the American auto giant.

Kim Tae-gu, chairman of Daewoo Motors Co., expressed hope that the negotiations will be wrapped up ``as quickly as possible.''

In a statement, GM and Daewoo said they would ``jointly explore common interests in a wide range of business opportunities both at home and abroad.''

Desperate for cash, Daewoo has previously said it wanted General Motors to buy part of Daewoo Motors Co., its main subsidiary and South Korea's second largest car maker.

General Motors owned half of Daewoo Motors from 1978 to 1992 in a deal that allowed Daewoo to sell cars overseas using GM brand names. Their rocky marriage ended in 1992 with Daewoo buying out GM's share.

Daewoo Motor signed a memorandum with General Motors in February 1998 to form a broad business alliance but the transaction was never completed.

Daewoo, South Korea's second-largest conglomerate, narrowly escaped becoming South Korea's largest-ever bankruptcy in July when domestic creditors, mostly under government control, agreed to delay repayment of $5.8 billion in short-term debt for six months and extend $3.3 billion in new loans.

In return, Daewoo promised to cut its debt drastically by selling or spinning off most of its 40 subsidiaries and attracting foreign investment. Daewoo also put up $8.42 billion of stock and real estate as collateral, provided only for loans from domestic creditor banks.

Daewoo is under threat by foreign creditors to call in debts.