ID :
37158
Tue, 12/23/2008 - 16:25
Auther :
Shortlink :
http://m.oananews.org//node/37158
The shortlink copeid
Chinese parent to pull out of Ssangyong Motor if union resists restructuring
SEOUL, Dec. 23 (Yonhap) -- The chief executive of Ssangyong Motor Co., the South Korean unit of China's Shanghai Automotive Industry Corp., warned Tuesday the Chinese parent will pull out from the troubled carmaker if its labor union resists a restructuring plan.
Ssangyong Motor Chief Executive Officer Choi Hyung-tak made the remark at a
meeting with Rep. Jeong Jang-seon of the main opposition Democratic Party,
according to Jeong's office.
"If the labor union refuses to accept a restructuring plan and a withdrawal (of
the Chinese parent) is decided, the timing of withdrawal will be in early or
mid-January," Choi was quoted as saying in a statement released by the lawmaker's
office.
"That would mean bankruptcy for Ssangyong Motor," Choi was quoted as saying.
Officials at Ssangyong's public relations team weren't immediately available for
comment.
The comment came as Ssangyong has asked Shanghai Automotive, China's largest
state-run automaker, to inject fresh capital to help it ride out the liquidity
crisis.
Talks between Ssangyong and the Chinese parent over the capital injection are
still "in progress," Ssangyong spokesman Cha Ki-woong said on Monday.
The labor union of Ssangyong has protested against Shanghai Automotive's moves to
cut employee benefits and shut down its sole assembly plant, saying such moves
would meet with "strong resistance."
Ssangyong has decided to idle production from Dec. 17 until the end of the month
to reduce inventory. This is the third time this year that the troubled automaker
has suspended activity at its sole plant in the port city of Pyeongtaek, about 70
kilometers south of Seoul.
Hit by a continued sales slump at home and overseas, Ssangyong's cash reserves
have dwindled. Choi recently admitted that its reserves are fragile, saying it
will likely face a "critical period" early next year when a massive amount of
debt is set to mature.
In the third quarter of this year, Ssangyong lost 28.2 billion won (US$20.8
million), marking its fourth consecutive quarterly loss. Last month, the
automaker's sales plummeted 63 percent from a year earlier to 3,835 units.
(END)
Ssangyong Motor Chief Executive Officer Choi Hyung-tak made the remark at a
meeting with Rep. Jeong Jang-seon of the main opposition Democratic Party,
according to Jeong's office.
"If the labor union refuses to accept a restructuring plan and a withdrawal (of
the Chinese parent) is decided, the timing of withdrawal will be in early or
mid-January," Choi was quoted as saying in a statement released by the lawmaker's
office.
"That would mean bankruptcy for Ssangyong Motor," Choi was quoted as saying.
Officials at Ssangyong's public relations team weren't immediately available for
comment.
The comment came as Ssangyong has asked Shanghai Automotive, China's largest
state-run automaker, to inject fresh capital to help it ride out the liquidity
crisis.
Talks between Ssangyong and the Chinese parent over the capital injection are
still "in progress," Ssangyong spokesman Cha Ki-woong said on Monday.
The labor union of Ssangyong has protested against Shanghai Automotive's moves to
cut employee benefits and shut down its sole assembly plant, saying such moves
would meet with "strong resistance."
Ssangyong has decided to idle production from Dec. 17 until the end of the month
to reduce inventory. This is the third time this year that the troubled automaker
has suspended activity at its sole plant in the port city of Pyeongtaek, about 70
kilometers south of Seoul.
Hit by a continued sales slump at home and overseas, Ssangyong's cash reserves
have dwindled. Choi recently admitted that its reserves are fragile, saying it
will likely face a "critical period" early next year when a massive amount of
debt is set to mature.
In the third quarter of this year, Ssangyong lost 28.2 billion won (US$20.8
million), marking its fourth consecutive quarterly loss. Last month, the
automaker's sales plummeted 63 percent from a year earlier to 3,835 units.
(END)
