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By Kim Myong-hwan

SEOUL, Nov 18 (Reuters) - Unpaid for three months and faced with massive layoffs, South Korea's Daewoo Motor union is angry that it has been blamed for massive problems at the automaker.

``What wrong have we done, compared with follies by management, creditors and the government?'' Kim Il-seob, chairman of Dewoo Motor's 13,000-strong union, told Reuters on Saturday. ``They are driving us into a blind alley. This is an evil-doer's audacity,'' he said in an interview.

Daewoo Motor, the country's third largest automaker, has not been able to pay its 19,000 employees since August after creditors cut its credit line, demanding drastic job cuts and other cost-cutting measures.

``We have no other choice but to take to the streets to make our case understood,'' Kim said.

His union members would rally later on Saturday at a subway station near Daewoo's largest local plant in Pupyong, he added.

The bankrupt automaker filed for court receivership earlier this month after the union rejected a proposal to cut 3,500 jobs, which was a condition creditors had set the firm for fresh loans.

The courts are expected to rule on the fate of Daewoo Motor by early December and analysts said the company was more likely to be placed under receivership.

Once the receivership application is approved, a court-appointed management would be able to by-pass local labour laws that make layoffs virtually impossible.

``It looks like they (the government, creditors and management) can do whatever they want to,'' said union leader Kim. ``But can they really restore order by purging only union workers?''

He said the management should be responsible for reckless investment expansion, creditors for sub-standard credit analysis and the government for heavy-handedness on banks.

``The collapse of Daewoo Motor is truly a combination of their faults,'' Kim said. ``But they are trying to pass all the blame over to us, instead of taking the responsibility themselves.''

``To protect our lives, we will have to organise massive rallies in collaboration with Korean Confederation of Trade Unions and civic groups,'' Kim added.

He said talks with management, creditors and the government were possible only if they provided fresh funds first.

``It is mean to try to squeeze concessions by freezing salaries. They should inject money first,'' Kim said.

An official at the Korea Development Bank, Daewoo Motor's main creditor, said creditors would not allow fresh loans unless the Daewoo Motor union agreed to a job-cut plan.

``It is up to the union whether Daewoo Motor gets fresh loans,'' said J.M. Yoon, spokesman for Korea Development Bank. "Again we don't want our money wasted.

Daewoo Motor incurs about 150 billion won ($131.5 million) of operating losses a month as its main plant in Pupyong, in the western outskirts of Seoul, has been bought to a halt since early November and depressed local sales have forced other plants in Kunsan and Changwon to cut operations.

The creditors have spent almost 2 trillion won supporting the automaker since they put it and 11 other Daewoo Group [DWGR.UL] companies under a debt workout programme in August 1999.

Although, the automaker's domestic debts have been frozen with the receivership application, calls for payments up-front are disrupting parts and vehicle deliveries at its plants at home and abroad, including factories in Poland and Ukraine.

Daewoo has five domestic plants and 12 factories in 11 other countries, which in turn support thousands of subcontractors.

The International Monetary Fund, which came to Korea's rescue after a 1997 financial crisis, said on Wednesday swift action was needed to prevent Daewoo's asset value from eroding.

Analysts expect creditors to move quickly in finding a buyer for Daewoo Motor and related firms, but more likely in return for job cuts and other concessions from its union.

They are in talks with General Motors (NYSE:GM - news) and partner Fiat and GM group vice president Rudolph Schlais told Reuters this week the U.S. auto giant remained interested.

Daewoo Motor's union is against the sale of Daewoo Motor to GM because the union believes this would trigger massive layoffs.