(3rd LD) Ssangyong Motor to cut 37 pct of workforce in survival bid

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SEOUL, April 8 (Yonhap) -- Stung by fears of a liquidation and collapsing sales,
Ssangyong Motor Co. said Wednesday it will cut 2,646 jobs, or about 37 percent of
its total workforce, in an effort to turn itself around.
Ssangyong, under bankruptcy protection and 51-percent owned by China's top
automaker Shanghai Automotive Industry Corp. (SAIC), described the job-cut plan
as a "quintessential condition" for the company's survival.
"The self-rescue effort, including job cuts, is a quintessential condition for
the company's resuscitation," said Lee Yoo-il, one of two court-appointed
managers at Ssangyong.
"While pains and rifts will be unavoidable, the company will try to persuade
stakeholders to understand the fact that no future will be guaranteed without a
radical self-rescue effort," Lee said.
The plan marks the first mass layoffs by a South Korean company since the global
economic crisis depressed sales of domestic automakers.
It is also expected to meet strong resistance from Ssangyong's 7,100 union
employees. Earlier in the day, the Ssangyong union said it will declare a
"do-or-die battle" if the company announces the job-cut plan.
After the announcement, however, shares of Ssangyong jumped 14.85 percent to
close at 1,740 won (US$1.3) on the Seoul bourse.
Ssangyong was abandoned by SAIC in January after the Chinese parent refused to
make any major effort to save its affiliate.
If the restructuring program is deemed unviable, creditors of Ssangyong will
liquidate the automaker.
On May 22, a bankruptcy judge at the Seoul Central District Court will meet
creditors of Ssangyong and its debt holders to decide on the viability of the
automaker.
Ssangyong, which has an annual production capacity of 200,000 vehicles, posted a
net loss of 709.7 billion won (US$530.3 million) in 2008 on sales of 2.5 trillion
won, down 20 percent from a year earlier.
In the first three months of this year, Ssangyong's vehicle sales nosedived 76
percent to 6,471 units.
Under the restructuring program, Ssangyong said it expects to sell 55,700
vehicles this year, down 58 percent from last year, the company said.
Ssangyong said it could to bounce back into the black in the second-half of next
year if the job-cut plan and other self-rescue efforts are successful.
With the bankruptcy protection, SAIC, which still owns a 51-percent stake in
Ssangyong, relinquished its control of the South Korean carmaker.
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