Ssangyong Motor workers ready to negotiate turnaround plan

SEOUL, Jan. 12 (Yonhap) -- Unionized workers at beleaguered Ssangyong Motor Co.
said Monday they were prepared to discuss a turnaround plan that would include
wage cuts and other measures.

South Korea's smallest automaker applied for court receivership last week to
avoid bankruptcy. For months the company had been pleading with its parent,
China's Shanghai Automotive Industry Corp. (SAIC), for a cash injection to help
it cope with dwindling sales.
While Ssangyong's workers voted in favor of a full strike against job cuts, the
union said it would not go on strike for the time being citing "negative side
effects on the overall economy."
But the union said it will file a lawsuit against SAIC to seek compensation,
accusing the Chinese parent of stealing car-manufacturing technology and failing
to honor its investment pledge.
"We have no immediate plan to go on strike," union leader Han Sang-kyun said at a
press conference held in the city of Pyeongtaek, about 70 kilometers south of
Seoul, the home of Ssangyong's sole plant.
"If we go on strike right now, the plant will be halted and subcontractors will
collapse," Han said. "Instead, we will wage a legal battle against SAIC."
Some observers have called Ssangyong the first high-profile casualty of the
global economic crisis. Like the United States' Big Three, the automaker has
suffered from low demand due in part to a line-up that is dominated by
gas-guzzling sport-utility vehicles.
If a Seoul court accepts the receivership, SAIC will be forced to give up its
management control at Ssangyong. Creditor banks and a court-appointed manager
will then decide whether to keep Ssangyong afloat or liquidate it.
Ssangyong employs about 7,100 workers. About 5,200 of them are union members.
On Monday, the Seoul Central District Court was expected to bar Ssangyong's
creditors from selling the automaker's assets, the first administrative step to
full receivership.
Even if the court approves Ssangyong's application, the company's future will
remain unsure due to a deepening global economic crisis that has severely
impacted the auto market, analysts say.
Creditor banks, led by state-run Korea Development Bank, expect Ssangyong to stay
afloat for no more than a month without financial assistance.
Ssangyong owes a total of 600 billion won (US$440 million) to creditors and 150
billion worth of convertible bonds maturing in April, analysts say.
The automaker has an annual production capacity of 200,000 vehicles. It reported
a net loss of 98 billion won in the January-September period last year, hit by
slumping sales.
Analysts say the company is burning through 25 billion won in cash every month.
(END)