Shanghai Automotive Industry Corp. (SAIC) has committed US $1 billion to strengthen Ssanyong Motor, in which it has a controlling stake, Ssangyong union leaders and public relations officers told the Korea Times.

During his meeting with the union leaders of Ssangyong in Shanghai last week, Hu Maoyuan, chairman of SAIC Motor and a CEO of the parent SAIC Group, reportedly said the Chinese shareholder plans to invest about $1 billion in the Korean subsidiary over the next five years.

As Shanghai Automotive, which acquired Ssangyong Motor a year ago, hesitated to unveil its projects to develop the company, the union directly went to China and met the chairman.

According to the union, Hu Maoyuan said SAIC Motor will unveil its mid and long-term business projects, involving investment totaling $1 billion early next year after holding a board of directors' meeting on 27 December.

The chairman also said it is necessary for Ssangyong Motor to resolve some of its structural problems, including management systems, the union told the paper.

The union said it is important to narrow opinion gaps between labour and management through continuous talks to achieve the steady development of the carmaker.

But the union leader declined to comment on whether or not the speculation that SAIC Motor is transferring Ssangyong technology to China was discussed with Hu Maoyuan.

The Korea Times said the union had planned to go on strike if the chairman gave no satisfactory answers for the development plan of the Korean unit. Ssangyong workers are expected to scrap the tentatively scheduled strike as there was some agreement in China.

As Jiang Zhiwei, the president of Ssangyong Motor and a Chinese executive of SAIC Motor, have failed to give satisfactory answers, the union selected the SAIC Motor chairman as its negotiation partner.

Some union officials had formerly alleged that Ssangyong management has coordinated technology relocation to China by dispatching more than 20 staffers in charge of research and development to the headquarters of SAIC Motor, the Korea Times added.