(5th LD) Strikers end occupation of Ssangyong plant

(ATTN: ADDS quotes, stock price, analysis; TRIMS)
By Kim Deok-hyun
PYEONGTAEK, South Korea, Aug. 6 (Yonhap) -- Hundreds of laid-off workers ended
their violent occupation of the paint shop of troubled Ssangyong Motor Co.
Thursday as union leaders and management agreed on the number of layoffs, company
officials said.

The deal came 77 days after workers barricaded themselves inside the paint shop
packed with highly flammable materials, demanding their jobs back, but also
heightening skepticism over whether the maker of the Rexton sport-utility vehicle
and the Chairman luxury sedan can survive its own.
Ssangyong, the smallest carmaker in South Korea, entered bankruptcy protection in
February in return for implementing a turnaround plan calling for 36 percent of
its workforce, or 2,646 employees, to be cut.
Since then, some 1,670 workers left the company through voluntary retirement
plans, while the remaining 976 workers went on strike. As police stepped up their
siege of the plant, more than half voluntarily gave up the occupation as of
Wednesday.
Under the deal, the union agreed to accept a plan to eventually lay off 52
percent of the 976 workers, said Lee Yoo-il, one of two court-appointed managers
at Ssangyong. The remaining 48 percent will be given unpaid long-term leaves of
absence.
"We are very relieved as the situation is peacefully resolved," Lee told
reporters after signing the agreement with the union. "Ssangyong Motor will make
the utmost efforts to normalize operations."
The company said it will withdraw strike-related lawsuits it filed against the
union.
In late July, thousands of riot police moved into the factory in the city of
Pyeongtaek, about 70km south of Seoul, cornering the protesters, who fought back
by shooting nuts and bolts from large slingshots.
The confrontation intensified this week, with some creditors filing a petition
demanding a bankruptcy court in Seoul to swiftly liquidate the debt-swamped
carmaker to recoup their debts.
Armed with a court-ordered eviction order, hundreds of helmeted riot police
cornered the protesters. In dramatic raids, about 100 police commandos rappeled
down ropes hanging from helicopters to seize all but the paint shop.
Protesters fought back with steel pipes and firebombs, but police overpowered
them. This week's operation left about 100 people wounded, some of them
seriously.
By Wednesday noon, all protesting unionists were forced into the paint shop, and
police gave the protesters one more day to surrender or reach a compromise with
the management.
Buoyed by the news of the end of occupation, shares of Ssangyong jumped by 14.77
percent, nearly the daily trading limit, to 2,020 won in Seoul.
However, how Ssangyong will achieve viability is an open question.
Ssangyong's woes largely stem from shrinking demand amid the worldwide economic
crisis and a lack of investment from its Chinese parent, Shanghai Automotive
Industry Corp.
Consumers have shunned buying Ssangyong cars because its line-up is dominated by
gas-guzzling SUVs.
"The future of Ssangyong remains very uncertain because it will be difficult for
the company to regain its profitability amid a shattered reputation from the
strike," said Kong Jeong-ho, an analyst at Eugene Investment and Securities in
Seoul.
In the first six months of this year, sales by Ssangyong, which has an annual
production capacity of 200,000 units, plunged 73.9 percent from the same period
last year to 13,020 units. The months-long strike also cost Ssangyong 316 billion
won in lost production.
Shanghai Automotive still owns a 51 percent stake in Ssangyong, but the Chinese
parent lost management control after the carmaker entered bankruptcy protection.
(END)