Ssangyong Motor resumes operations after nearly three-month stoppage

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PYEONGTAEK, South Korea, Aug. 13 (Yonhap) -- Ssangyong Motor Co., South Korea's
smallest carmaker and currently under bankruptcy protection, resumed output
Thursday after an 83-day production stoppage due to a labor strike.
Ssangyong's operations have been suspended as unionized workers occupied the
automaker's only plant in Pyeongtaek, about 70km south of Seoul, in protest
against massive layoffs.
Hundreds of unionized workers occupied the plant for 77 days, battling riot
police with firebombs and steel pipes. Last Thursday, they agreed to end their
occupation after a massive police raid.
Ssangyong Motor says it expects to produce 2,600 units this month and roughly
4,000 units per month from September.
"It is not the right time to discuss the sale (of the carmaker), but we are
confident that there will be an buyer," Ssangyong Motor's court-appointed manager
Park Young-tae said.
Beleaguered Ssangyong Motor is seeking potential investors to take over the
company as it struggles for survival after a months-long labor strike and
plummeting sales.
Industry watchers said at least three local and foreign companies in China and
India have shown interest in taking over the ailing automaker.
Finding a new owner is viewed as a practical solution for the cash-strapped
automaker to put its output back in order while winning back sales.
On Wednesday, the automaker said it will borrow 130 billion won (US$104 million)
from the state-run Korea Development Bank.
Unionists took over the factory in late May demanding Ssangyong scrap a plan to
fire 36 percent of its workforce.
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 the carmaker 316
billion won ($255 million) in lost production.
The automaker's sales plunged 99 percent to 71 vehicles last month, making it
more difficult to come out of bankruptcy.
SAIC Motor Corp., China's biggest domestic automaker, lost management control
when Ssangyong entered receivership in February. A bankruptcy court gave the
South Korean company until Sept. 15 to submit a turnaround plan.
sam@yna.co.kr
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