ID :
39378
Wed, 01/07/2009 - 19:50
Auther :
Shortlink :
http://m.oananews.org//node/39378
The shortlink copeid
SAIC weighs fate of Ssangyong Motor
SEOUL, Jan. 7 (Yonhap) -- China's Shanghai Automotive Industry Corp. was hammering out the details of a plan to throw a lifeline to its ailing South Korean unit, Ssangyong Motor Co., according to company officials Wednesday.
Ssangyong will hold a nine-member board meeting on Thursday in the Chinese city
of Shanghai where SAIC is based, to finalize the restructuring plan, they said.
In return for the lifeline, SAIC may ask Ssangyong to slash thousands of jobs.
"I'm not informed about details, but I think a radical restructuring plan would
be initiated at the board meeting," said an outside director of Ssangyong before
departing to Shanghai.
"Objectively, it's inevitable for Ssangyong to cut the workforce and reduce
wages," the director said on the condition of anonymity.
Out of nine board members, six are Chinese. So any plan by SAIC would be easily
approved, the director said.
Unless SAIC injects fresh funds to Ssangyong, the carmaker may face liquidation,
analysts say.
Earlier in the day, a local daily, the Hankook Ilbo reported that SAIC was
demanding Ssangyong cut as many as 3,000 factory workers in return for 120
billion won (US$93.1 million) in financial support.
An official at Ssangyong's public relations team declined to comment on the
report. Ssangyong employs about 7,100 employees.
SAIC has been under pressure from South Korea's state-run Korea Development Bank,
the main creditor of Ssangyong, to provide fresh funds to the troubled affiliate.
About 5,200 unionized workers at Ssangyong have threatened to strike if the
Chinese parent demands Ssangyong slash the workforce.
SAIC purchased a 51 percent stake in Ssangyong for $500 million in 2004, marking
the first direct investment by a Chinese company into a local manufacturer.
The acquisition has often been marred by conflicts with the union, which has
accused SAIC of stealing Ssangyong's car-manufacturing technology and failing to
honor its investment pledge.
Ssangyong reported a net loss of 98 billion won in the January-September period
last year, hit by slumping sales.
As of November last year, Ssangyong had 877 billion won in interest-bearing
debts, with total liabilities in excess of 1.46 trillion won, according to the
company's filing with the stock exchange.
(END)
Ssangyong will hold a nine-member board meeting on Thursday in the Chinese city
of Shanghai where SAIC is based, to finalize the restructuring plan, they said.
In return for the lifeline, SAIC may ask Ssangyong to slash thousands of jobs.
"I'm not informed about details, but I think a radical restructuring plan would
be initiated at the board meeting," said an outside director of Ssangyong before
departing to Shanghai.
"Objectively, it's inevitable for Ssangyong to cut the workforce and reduce
wages," the director said on the condition of anonymity.
Out of nine board members, six are Chinese. So any plan by SAIC would be easily
approved, the director said.
Unless SAIC injects fresh funds to Ssangyong, the carmaker may face liquidation,
analysts say.
Earlier in the day, a local daily, the Hankook Ilbo reported that SAIC was
demanding Ssangyong cut as many as 3,000 factory workers in return for 120
billion won (US$93.1 million) in financial support.
An official at Ssangyong's public relations team declined to comment on the
report. Ssangyong employs about 7,100 employees.
SAIC has been under pressure from South Korea's state-run Korea Development Bank,
the main creditor of Ssangyong, to provide fresh funds to the troubled affiliate.
About 5,200 unionized workers at Ssangyong have threatened to strike if the
Chinese parent demands Ssangyong slash the workforce.
SAIC purchased a 51 percent stake in Ssangyong for $500 million in 2004, marking
the first direct investment by a Chinese company into a local manufacturer.
The acquisition has often been marred by conflicts with the union, which has
accused SAIC of stealing Ssangyong's car-manufacturing technology and failing to
honor its investment pledge.
Ssangyong reported a net loss of 98 billion won in the January-September period
last year, hit by slumping sales.
As of November last year, Ssangyong had 877 billion won in interest-bearing
debts, with total liabilities in excess of 1.46 trillion won, according to the
company's filing with the stock exchange.
(END)
