There is little sign this week of any end to a strike that is crippling Ssangyong. As the strike drags on, revenue losses are mounting with some observers speculating that liquidation of assets is getting closer.
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The plant is occupied by a group of about 1,000 people comprised of Ssangyong union members and their families, students and members of the umbrella group Korean Confederation of Trade Unions.
Union workers began partial strikes in April in protest against the bankrupt company’s plans to reduce staff by more than 2,500 and, on 22 May, stepped up the strikes and began an illegal occupation of the Pyeongtaek plant, bringing production to a standstill.
Reports in Korea say that just 90 Ssangyong vehicles have been sold in Korea this month and that insufficient inventory means that display models have been put up for sale. The company expects it will be difficult to even sell 100 units this month, even if production lines restart, according to one report.
Park Young-tae, Ssangyong’s court-appointed court receivership manager, met with the labor union on Thursday and Friday, but failed to reach an agreement.
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By GlobalDataThe management said although the company offered to back off on several issues including layoffs, the union adamantly refused, emphasising that it would not make concessions until layoff plans are scrapped and irregular workers’ job security is guaranteed.
The union has since said that another option would be to turn the automaker into a public company with Korea Development Bank becoming its major shareholder. They also demanded that a public bailout fund be injected into the company.
Some analysts say that a lack of government intervention and the continuing strike mean a slow death for Ssangyong as sales continue to plunge and assembly lines remain halted.
The company is expected to suffer an additional 199-billion-won loss should the strike continue through July. Consequently, the payment of all wages to its employees is likely to be halted again, the Korea Times reported.
“From the current situation, it would be no surprise if the court and creditors decide to dissolve Ssangyong from a strictly economic point of view,” an analyst at a local brokerage who declined to be named told the Korea Times.
COMMENT: Ssangyong – action needed, quick
