SAIC injects US$45 mln into Ssangyong Motor

(ATTN: UPDATES headline, lead and throughout with quotes, details; RESTORES some
previous material; ADDS closing stock price)
SEOUL, Jan. 5 (Yonhap) -- Cash-strapped Ssangyong Motor Co. said Monday it has
received US$45 million in financial aid from its Chinese parent, Shanghai
Automotive Industry Corp., brightening hopes that the embattled company may avoid
bankruptcy.
China's state-run Shanghai Automotive Industry Corp. (SAIC), which owns a
51-percent stake in Ssangyong, has been under pressure to provide new funds to
keep the troubled automaker afloat.
In a statement, the carmaker based in Pyeongtaek, South Korea, said the financial
support shows SAIC's "willingness for survival of Ssangyong Motor."
Ssangyong also received an order to supply 2,000 units of sport utility vehicles
and minivans to SAIC, the statement said.
Ssangyong will hold a board meeting on Thursday to decide on details of how to
normalize the ailing automaker, said Choi Nam-hyun, a company spokesman.
Earlier in the day, the chief of Ssangyong's labor union called for a strike
against potential job cuts.
Local newspapers, citing unnamed company sources, reported that SAIC had
requested that Ssangyong cut as many as 3,000 workers -- nearly half of its
factory jobs -- in exchange for fresh capital.
"Only by a landslide vote for a strike can we defend ourselves and thwart SAIC's
conspiracy," Han Sang-kyun, the union's leader, told members in a statement
posted on its Web site.
"Let's show our strength against the Chinese owner that has cheated us over the
past five years," Han said.
The union of some 5,200 members was voting Monday on the strike plan, with
balloting due to close Tuesday.
Han also threatened to disclose allegations of illegal accounting and technology
transfers, which he says were done by SAIC.
Also on Monday, SAIC and Ssangyong's main creditor, the Korea Development Bank,
resumed negotiations over a possible restructuring plan, company officials said.
The state-run KDB has called for SAIC to provide financial support to Ssangyong
as a precondition to extending loans for the cash-strapped carmaker.
On news that SAIC and KDB had resumed talks, shares of Ssangyong jumped 14.57
percent to close at 1,140 won in Seoul.
Last year, vehicle sales at Ssangyong, which has an annual production capacity of
200,000 units, dropped 29.6 percent from a year earlier to 92,665 units.
Ssangyong's Chief Executive Officer Choi Hyung-tak indicated that the carmaker
had been running out of cash quickly and would have to file for bankruptcy
without financial support.
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