The Chinese owner of South Korea’s SsangYong Motor has threatened to abandon the ailing SUV maker if its union rejects restructuring, a senior MP has said.
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The threat from Shanghai Automotive Industry Corp. was conveyed at talks in parliament between Ssangyong’s executives and legislators, Jeong Jang-Seon, head of a parliamentary committee, said in a statement cited by Agence France-Presse.
“We regard this as a very serious problem,” he said.
He quoted Ssangyong CEO Choi Hyung-Tak as saying the Chinese parent may decide to leave South Korea in January.
Choi has said Ssangyong, the country’s smallest automaker, may face a critical period early next year when a massive amount of debt matures.
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By GlobalDataSsangyong has asked for a cash injection from its Chinese parent but Korean newspapers said the request was turned down because the union had called on Chinese executives to resign.
For the third quarter Ssangyong, acquired by the Chinese company in 2004, posted a net loss of 28.2bn won (US$21m), the fourth consecutive quarterly loss.
The company said it expects a net loss of more than 100bn won this year due to a slump in demand.
Ssangyong halted production for two weeks from 17 December and said it would be unable to pay workers on time this month due to a lack of funds.
This has led to demonstrations by unionised workers.
