SsangYong Motor is working on restructuring plans with majority shareholder Shanghai Automotive Industry.
Ssangyong Motor chief executive Zhang Haitao had headed to China with SAIC director Jiang Zhiwei to discuss restructuring plans, sources told the Korea Herald. Last month they met with vice-minister of knowledge economy Rim Che-min to request the Korean government’s support for the ailing automaker which specialises in SUVs.
Zhang has been meeting with SAIC executives including the Chinese conglomerate’s vice chairman Chen Hong to discuss various issues including the restructuring plans, the sources told the paper. They also discussed the possibility of SAIC providing emergency funds for Ssangyong and the company’s relationship with the new hard line leaders of the labour union.
But Ssangyong Motor officials denied that Zhang was discussing such issues with SAIC, and said that the aim of his visit to China was only to convey the position of the Korean government and the automaker’s creditors.
Ssangyong Motor plans to finalise its recovery measures, including the restructuring plans, upon Zhang’s return on 5 January. The company plans next to notify the labour union and begin negotiations which are unlikely to go smoothly. SAIC maintains that it will inject new funds into Ssangyong Motor only if the union accepts its restructuring measures while the union is refusing to cooperate.
The union has claimed that the Chinese conglomerate has stolen key technologies including Ssangyong Motor’s diesel hybrid technology and that SAIC has failed to invest the 1.2 trillion won (US$900m) it promised in 2004 when it acquired 51% of Ssangyong Motor. The accusation has been under investigation since July.
The union is already considering a strike to protest proposed job cuts, which according to reports could make up to half of the factory workers redundant. Union members will vote on the issue on 5 and 6 January, company officials said.