ID :
40664
Wed, 01/14/2009 - 16:02
Auther :
Shortlink :
https://www.oananews.org//node/40664
The shortlink copeid
Ssangyong Motor's suppliers appeal for help
SEOUL, Jan. 14 (Yonhap) -- About 150 direct suppliers to Ssangyong Motor Co. pleaded with creditors and the Seoul government on Wednesday to provide financial assistance to the beleaguered carmaker.
Ssangyong, the South Korean unit of China's Shanghai Automotive Industry Corp.
(SAIC), has halted production at its only assembly plant indefinitely since
applying for court receivership to avoid bankruptcy.
"Given the huge economic impact of Ssangyong Motor, we ask for active cooperation
from the government and financial authorities," said Oh Yoo-in, who heads a group
representing Ssangyong's vendors.
Some observers have called Ssangyong the first high-profile casualty in South
Korea to the global economic crisis. Like the U.S. Big Three, the automaker has
floundered due to a line-up that is dominated by gas-guzzling sport-utility
vehicles.
Financial regulators and creditors, led by state-run Korea Development Bank, have
urged SAIC to help rescue Ssangyong. But SAIC has shown little interest in
bailing out the ailing affiliate.
Ssangyong employs some 7,100 workers while its direct vendors employ nearly
100,000 people.
If a Seoul court accepts the application for receivership, SAIC will lose its
management control but retain its 51-percent stake in Ssangyong.
SAIC bought the Ssangyong stake for US$500 million in 2004, but the stock's value
has since sank to about 60 billion won (US$45 million).
On Monday, the court froze debts and obligations at Ssangyong ahead of its
decision on whether to grant receivership early next month.
Even if the court accepts the receivership, Ssangyong faces a rough road ahead in
normalizing its operations due to battered auto markets at home and abroad,
analysts say.
South Korea's smallest automaker had debts amounting to 800 billion won at the
end of last year, with 150 billion won due to mature in April, according to
company officials.
Knowledge and Economy Minister Lee Youn-ho, who oversees the auto industry, told
lawmakers on Wednesday that Ssangyong "isn't totally hopeless."
When asked by a lawmaker whether Ssangyong could successfully make a turnaround,
Lee replied, "To date, it depends on the scope of the company's self-rescue plan,
including job cuts."
(END)
Ssangyong, the South Korean unit of China's Shanghai Automotive Industry Corp.
(SAIC), has halted production at its only assembly plant indefinitely since
applying for court receivership to avoid bankruptcy.
"Given the huge economic impact of Ssangyong Motor, we ask for active cooperation
from the government and financial authorities," said Oh Yoo-in, who heads a group
representing Ssangyong's vendors.
Some observers have called Ssangyong the first high-profile casualty in South
Korea to the global economic crisis. Like the U.S. Big Three, the automaker has
floundered due to a line-up that is dominated by gas-guzzling sport-utility
vehicles.
Financial regulators and creditors, led by state-run Korea Development Bank, have
urged SAIC to help rescue Ssangyong. But SAIC has shown little interest in
bailing out the ailing affiliate.
Ssangyong employs some 7,100 workers while its direct vendors employ nearly
100,000 people.
If a Seoul court accepts the application for receivership, SAIC will lose its
management control but retain its 51-percent stake in Ssangyong.
SAIC bought the Ssangyong stake for US$500 million in 2004, but the stock's value
has since sank to about 60 billion won (US$45 million).
On Monday, the court froze debts and obligations at Ssangyong ahead of its
decision on whether to grant receivership early next month.
Even if the court accepts the receivership, Ssangyong faces a rough road ahead in
normalizing its operations due to battered auto markets at home and abroad,
analysts say.
South Korea's smallest automaker had debts amounting to 800 billion won at the
end of last year, with 150 billion won due to mature in April, according to
company officials.
Knowledge and Economy Minister Lee Youn-ho, who oversees the auto industry, told
lawmakers on Wednesday that Ssangyong "isn't totally hopeless."
When asked by a lawmaker whether Ssangyong could successfully make a turnaround,
Lee replied, "To date, it depends on the scope of the company's self-rescue plan,
including job cuts."
(END)
