ID :
39725
Fri, 01/09/2009 - 18:48
Auther :
Shortlink :
http://m.oananews.org//node/39725
The shortlink copeid
Ssangyong`s board reconvenes amid fears of mass layoffs
SEOUL, Jan. 9 (Yonhap) -- The board of Ssangyong Motor Co. resumed its meeting in
China on Friday to finalize details of a plan to restructure the beleaguered
carmaker, company officials said.
Ssangyong, which is 51 percent owned by China's Shanghai Automotive Industry
Corp., is rapidly bleeding cash and may face liquidation unless it receives a
hefty supply of capital from the Chinese parent in exchange for the restructuring
plan that would reportedly force nearly half of its factory workers to leave the
company.
Ssangyong's 5,200-strong labor union has vowed zero-tolerance on the reported
restructuring plan and threatened to strike if SAIC demands job cuts.
The nine-member board of Ssangyong held a six-hour meeting in the Chinese city of
Shanghai, where SAIC is based, on Thursday, but failed to agree on the
restructuring plan, according to Ssangyong officials in Seoul.
"The board meeting resumed this morning. Ssangyong and SAIC will jointly announce
the outcome of the meeting by today," said an official at Ssangyong, declining to
elaborate further.
On Thursday, Chinese media reported SAIC demanded Ssangyong cut some 2,000
workers in return for US$200 million in financial support. Choi Nam-hyun, a
Ssangyong spokesman, denied the report.
SAIC has been under pressure from South Korea's state-run Korea Development Bank,
the main creditor of Ssangyong, to provide fresh capital to the troubled
affiliate. KDB says that only after such a move would it consider extending loans
to Ssangyong.
SAIC bought a 51 percent stake in Ssangyong for $500 million in 2004, marking the
first direct investment by a Chinese company in 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 ($73.8 million) in the
January-September period last year, hit by slumping sales. Ssangyong is burning
through 25 billion won in cash every month, analysts say.
As of last November, 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)
China on Friday to finalize details of a plan to restructure the beleaguered
carmaker, company officials said.
Ssangyong, which is 51 percent owned by China's Shanghai Automotive Industry
Corp., is rapidly bleeding cash and may face liquidation unless it receives a
hefty supply of capital from the Chinese parent in exchange for the restructuring
plan that would reportedly force nearly half of its factory workers to leave the
company.
Ssangyong's 5,200-strong labor union has vowed zero-tolerance on the reported
restructuring plan and threatened to strike if SAIC demands job cuts.
The nine-member board of Ssangyong held a six-hour meeting in the Chinese city of
Shanghai, where SAIC is based, on Thursday, but failed to agree on the
restructuring plan, according to Ssangyong officials in Seoul.
"The board meeting resumed this morning. Ssangyong and SAIC will jointly announce
the outcome of the meeting by today," said an official at Ssangyong, declining to
elaborate further.
On Thursday, Chinese media reported SAIC demanded Ssangyong cut some 2,000
workers in return for US$200 million in financial support. Choi Nam-hyun, a
Ssangyong spokesman, denied the report.
SAIC has been under pressure from South Korea's state-run Korea Development Bank,
the main creditor of Ssangyong, to provide fresh capital to the troubled
affiliate. KDB says that only after such a move would it consider extending loans
to Ssangyong.
SAIC bought a 51 percent stake in Ssangyong for $500 million in 2004, marking the
first direct investment by a Chinese company in 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 ($73.8 million) in the
January-September period last year, hit by slumping sales. Ssangyong is burning
through 25 billion won in cash every month, analysts say.
As of last November, 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)
