From the catwalk above a vast factory floor where a sea of humming and hissing automated machines churn out car engines, veteran Kia Motors employee Cho Jang Rae asks, "How can you close down something as impressive as this?"

Good question. Five months after Kia Motors went bankrupt, it is still making nearly 2,000 cars a day while the South Korean government struggles to decide what to do with the company's giant plant, its 30,000 unionized workers and its more than 5,000 subcontractors and parts suppliers.

"Save a grain of rice and help save Kia," urges a banner in the cafeteria in the engine assembly room.

Now, faced with the prospect that the entire nation could go bankrupt, the Kia Motors factory here presents just one of countless tough decisions facing South Korea's government and the president who will be elected today. For South Korea to meet the requirements for the $57 billion bailout it negotiated earlier this month with the International Monetary Fund, the fund is demanding that the country overhaul its economy, until recently the 11th largest in the world.

The IMF says many of South Korea's companies have expanded too far, too fast and that the nation has borrowed money recklessly to keep firms like Kia alive and to meet the ambitions of corporate chiefs and a heavily unionized work force.

To the IMF and other analysts, Kia has become Exhibit A of what's wrong with Korea Inc., where eight of the 30 biggest companies have gone bankrupt this year. With easy access to cheap loans, Kia Motors contributed to a worldwide glut of automobile production capacity and to lower prices in global car markets.

The Kia Motors Asan Bay plant provides a glimpse of what's happening on the ground instead of at the IMF negotiating table, and it hints at the wrenching way in which the IMF program will change the way people work and think in South Korea.

"It's impossible that the plant would close down," said Kim Chung Su, a guard at the factory gate where a banner reads, "We must save Kia to repay our countrymen for their encouragement." Kim, who has worked for Kia for a decade, said, "Kia's destiny is my destiny."

Asked about the possibility that the factory might close, another Kia worker, Choh Dong In, said: "That is a thing that should never happen. I've never even thought about it." Choh, who guards against theft of materials from the factory and who has worked there for 11 years, said, "I think of Kia as a member of my family, as part of myself."

Choh said the company is in trouble because of "insufficient help from the government."

But many economists and industry analysts say the fault lies within Kia, which was once the second-largest car maker and eighth-largest company in this heavily industrialized nation. Kia, they say, is a case study of the overexpansion and excessive borrowing that has helped push the South Korean economy into its current crisis.

"Kia was a big wake-up call that perhaps the Korean economy should have listened to before," said Hun Sok Kang, an automobile industry analyst with the Seoul branch of ING Barings Securities Ltd.

Ironically, Kia was long considered the exception to the much-criticized South Korean model of chaebols -- huge conglomerates with tentacles in dozens of businesses. Founded in 1944, Kia evolved logically from a maker of bicycles into a maker of three-wheel vehicles, then motorcycles, then cars.

Unlike the big chaebols, which are controlled by tightknit families, Kia's shares are publicly held, and a sizable chunk is owned by workers. Unlike Samsung group, which has prevented unions from organizing, Kia has a union and reasonably good relations with it. And unlike the chaebols run by their founders' children, Kia's chairman, Kim Sun Hong, started off making bicycles and later became a professional manager.

In 1980, Kim rescued the company from bankruptcy by placating creditors and developing the Bongo, a popular and profitable small flatbed truck.

But Kim caught the disease that is plaguing South Korean executives today: He wanted to be bigger. He expanded Kia's specialty steel business -- and expanded losses to about $50 million a year. He branched into construction, suffering further losses, and took over Asia Motors, a money-losing maker of commercial vehicles. He also entered a costly project in Indonesia, with the son of Indonesian President Suharto as a partner, that still isn't finished.

Kim also poured money into Asan Bay. Despite a glut in South Korean car production, he added a second plant next to the 33 million-square-foot factory and set an annual production target of 1.5 million cars for 2001. Kia expanded its sales network overseas and opened research centers that designed and built models of cars run on electricity, ethanol and solar power. Through its expansion, Kia would "bring bounty and happiness to mankind and realize a better society," says a corporate video that hasn't been updated.

In the process of undertaking these ambitious plans, Kia loaded up on debt. The firm's debt-to-equity ratio came close to 500 percent, not unusual in South Korea. But that kind of debt level -- five to 10 times what would be considered high at an American corporation -- could only be sustained by rapid economic growth.

Instead, South Korea's sizzling growth cooled off last year. In the first half of 1997, domestic car sales fell 11 percent. And because of three successful new models introduced by rival Daewoo, Kia's share of the South Korean car market skidded to 22 percent, from 43 percent a year earlier. Kia's inventories doubled, with 50,000 vehicles parked on lots.

Turning overseas for relief, Kia's car exports boomed by 50 percent during the first half of the year, but that was achieved by slashing profit margins. New international competition was on the way too -- from South Korea. South Korean companies planned to boost their production from 3.7 million cars a year to 6.3 million in 2000.

With the sudden financial crisis in Southeast Asia, Kia came under further pressure, and bankers suddenly took a closer look at the firm. They demanded Kim's resignation. He resisted.

On July 15, the company went into bankruptcy protection. Its debts were frozen for two months, and emergency loans were extended. Workers held rallies on the company parade grounds as the company flag flew overhead. Bonus payments were returned, gasoline coupons canceled, and 1,000 people were pushed into early retirement or encouraged to leave.

Kim, once regarded as the Lee Iacocca of the Korean car business, disappeared on July 15 and is believed to be in hiding. He hasn't been seen in public or at the company offices since.

"The trigger for a lot of these companies was the turmoil in the market," said Hun of ING Barings. "Interest rates and the economic slowdown brought to the surface a lot of problems that weren't so visible before."

Kia's troubles are already rippling through communities and businesses, as well as chaebol boardrooms. Down the road from the Asan Bay plant, Ee Jong Lim, the owner of a small grocery store, said hard times at the plant have taken their toll. Workers don't spend as much money as before, and sales have plunged about 60 percent. And he's one of the lucky ones. Four other shops nearby have closed down.

"I'm doing better than most," Ee said.

In addition, Kia did business with more than 1,000 companies that supplied items such as seats and handles and that are now at risk. Kia often guaranteed the loans of the small companies, or its notes pledging contract amounts were used by the smaller firms to obtain loans.

One possible fate for the Asan Bay factory would be a takeover by the Samsung group, which many workers suspect of plotting to sabotage the more union-friendly Kia. Samsung has its own plant coming on line next year.

"This is the sort of crisis that the Korean economy hasn't faced over the past 20 years," said Hun. "A lot hasn't hit home to workers up to now, but that will be the measure of the restructuring going on." CAPTION: A worker inspects engine parts on the assembly line at Kia Motors' Sohari plant. The auto maker is one of eight of Korea's biggest firms that have gone bankrupt in 1997. (Photo ran in an earlier edition)