Ssangyong Motor still in talks with union over plant shutdown

SEOUL, Dec. 15 (Yonhap) -- Ssangyong Motor Co., the South Korean unit of China's
Shanghai Automotive Industry Corp., said Monday it remains in negotiations with
its labor union to halt its lone assembly plant amid a sharp slump in sales and a
prolonged liquidity crisis.
"Talks are still underway and no decision was made yet," Ssangyong Motor said in
a statement, denying an earlier report by the Chosun Ilbo, the nation's
largest-circulation daily, that it will shut down the plant in the port city of
Pyeongtaek, about 70 kilometers south of Seoul, from Wednesday.
The troubles at Ssangyong, South Korea's smallest automaker, were deepening last
week as its union warned the automaker against cutting employee benefits and
idling its sole assembly plant, saying such moves would meet with "strong
resistance."
Ssangyong's Chief Executive Officer Choi Hyung-tak has asked SAIC to inject fresh
capital to help Ssangyong weather the crisis.
In the third-quarter of this year, Ssangyong lost 28.2 billion won (US$21.2
million), marking its fourth consecutive quarterly loss. Last month, the
automaker's sales plummeted 63 percent from a year earlier to 3,835 units.
In a desperate move to slash costs, Ssangyong has been in talks with its union to
negotiate a temporary closing of the Pyeongtaek plant and slash employee
benefits.
Early this month, Choi of Ssangyong admitted the company's cash reserves were
fragile, and added the automaker may face "a critical period" early next year.
The Chinese state-run auto firm acquired a 51-percent stake in Ssangyong for $500
million in 2004.
On Friday, China's new ambassador to South Korea, Cheng Yonghua, visited the
Pyeongtaek plant.
"The Chinese government will give all necessary support to Ssangyong Motor,"
Cheng was quoted as saying in a statement released by the automaker. "If needed,
the (Chinese) government will cooperate and hold discussions with the Korean
government for the development of Ssangyong Motor."
Cha Ki-woong, a spokesman at Ssangyong, declined to give details on how the
Chinese government would offer its support.
(END)