Embattled Ssangyong says union talks have collapsed

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PYEONGTAEK, South Korea, Aug. 2 (Yonhap) -- The management of Ssangyong Motor Co.
said Sunday negotiations with its labor union have collapsed, raising tension at
the embattled automaker as it struggles to stave off bankruptcy.
Company officials said the talks fell through over differences on how many
workers will be retained. The announcement was made early Sunday after marathon
negotiations that began last week.
"The labor union has made clear in the last three days of talks that it cannot
accept a single layoff among its members," said a spokesman for the management.
He claimed the union used the talks to prolong its more than two-month occupation
of the Ssangyong plant here, about 70km south of Seoul.
The management said the standoff has darkened prospects for Ssangyong's survival,
costing nearly 300 billion won (US$244 million) in lost production.
Union leaders countered that it was the management who was obstructing progress
by continuing to push for a large-scale cut in the workforce.
The union has given the company an ultimatum outlining its demands, saying it
needs a reply by 10 a.m. Monday. Details of those demands have not been released.
Ssangyong, the smallest of South Korea's five automakers, is still owned by
China's Shanghai Automotive Industry Corp. But the Chinese parent lost management
control after Ssangyong entered court bankruptcy protection and has declined to
take measures to help the carmaker.
Ssangyong submitted to the court and its creditors a turnaround plan that slashes
36 percent, or 2,646, of its workers. If it fails to deliver on the plan by Sept.
15, the carmaker faces liquidation.
Some 1,670 workers have left the company through voluntary retirement plans. The
remaining 976 workers have barricaded themselves inside a paint shop at
Pyeongtaek plant that is stocked with flammable materials. Police tried
unsuccessfully to push them out while being pelted with nuts and bolts fired by
the unionists from slingshots.
The government has said it is prepared for the worst-case scenario, and is taking
measures to reduce a ripple effect on auto-parts suppliers triggered by troubles
at Ssangyong.
"The inability to reach a compromise has cast a dark cloud on the future of the
carmaker," said one official, who declined to be identified. "Every effort will
be made to help parts suppliers secure new sales outlets and replace losses
caused by the Ssangyong strike."
He said the government can offer overseas marketing support and help suppliers
win domestic contracts.
yonngong@yna.co.kr
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