Ssangyong says still waiting for board`s restructuring plan

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SEOUL, Jan. 8 (Yonhap) -- The beleaguered Ssangyong Motor Co. said Thursday it
was still waiting for the outcome of its board meeting led by its Chinese parent
amid reports of massive job cuts.
In the face of the global economic recession, Ssangyong, the smallest automaker
in South Korea, owned by China's Shanghai Automotive Industry Corp., is pushing
for a major restructuring program that would reportedly force nearly half of its
factory workers to leave the company.
Ssangyong's 5,200-strong labor union countered by threatening to call a full
strike unless SAIC abandons the reported job-cut plan.
However, the Chinese parent has indicated that it won't throw a lifeline to
Ssangyong if the union opposes the restructuring scheme. That would make
Ssangyong the nation's first high-profile casualty as the global financial crisis
spreads to South Korea.
Ssangyong's board was holding a meeting in the Chinese city of Shanghai earlier
in the day to finalize details of a plan to restructure Ssangyong in return for
financial support.
Unless SAIC provides a hefty supply of capital into Ssangyong, the cash-strapped
automaker may face liquidation, analysts say.
"The board meeting isn't finished yet," said Choi Nam-hyun, a spokesman at
Ssangyong in Seoul, denying a report by a Chinese Web site saying SAIC demanded
that Ssangyong cut some 2,000 workers. In exchange for job cuts, the Chinese
parent would offer US$200 million in fresh capital, according to the report.
Ssangyong's chief executive officer will return to Seoul early Friday, and then
the company may announce the meeting's result, Choi said.
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.
"Ssangyong Motor has a major shareholder. So, it will be difficult for us to
support Ssangyong unless Shanghai Automotive offers financial support first," an
official at KDB said.
SAIC bought 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 ($73.5 million) 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.
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