Negotiations fall apart over Ssangyong 

 

Ssangyong Motor Co.'s future prospects worsened yesterday as management and striking workers failed to reach an agreement.

 

The negotiations, which were resumed Thursday after a 42-day stand off, came to an abrupt end early yesterday morning over differences on restructuring plans.

 

The laid off workers have been occupying the carmaker's plant in Pyeongtaek, Gyeonggi Province since May 22, halting production for more than two months.

 

According to the company's estimates, the two-month long strike has prevented more than 13,000 vehicles from being produced and damages worth more than 300 billion won ($242 million).

 

"Unlike the earlier statement that it will be more flexible, the union is continuing to stick to its position that it will not accept any layoffs," Ssangyong court receivership manager Park Yong-tae said at the news conference yesterday.

 

 "The company has tried to persuade the union to change its position, but we ended the talks as progress was deemed impossible without fundamental changes."

 

The company had proposed to reduce the number of laid off workers to 331 from the current 947 and to offer them the voluntary redundancy program. For the remainder, the company drew up plans to put 290 people on unpaid leave, 100 in sales positions and to offer jobs to 253 people in after sales services.

 

The union, however, rejected the proposal and demanded that all laid off workers with the exception of those volunteering to take sales positions be put on unpaid leave. The union also proposed that the workers take turns on paid leave after they have been on unpaid leave for eight months.

 

The union also demanded that the company drop the charges against those involved in the strike.

 

Although the union gave that the management until 10 a.m. today to consider its demands, the company said that further negotiations will not happen unless the company's plans are accepted.

 

"We made it clear at the end of the negotiations that it is the end if the union does not accept the company's final offer," Park said.

 

"With the company having taken all the steps it can take, the only alternative is to file a revival plan based on liquidating the company unless the law is carried out against the illegal strike."

 

He added that the company's remaining 4,600 workers will try to enter the facilities if the situation is not resolved through negotiations or by the authorities.

 

Ssangyong is scheduled to file a revival plan by Sept. 15 when the future of the company will be decided by the courts. In addition, an association of Ssangyong creditors warned on Thursday that it would file for bankruptcy if the strike at the carmaker's Pyeongtaek plant is not resolved by the end of the month.

 

The creditors association said that it would file a petition asking the courts to declare the carmaker bankrupt as soon as possible and begin the process of selling and rebuilding the carmaker into a "good Ssangyong" at the beginning of next month if the strike continues.

 

However, some in the industry consider establishing a "good Ssangyong" an unlikely option as the company has only one brand and little assets to sell. In addition, the task of finding a buyer for the company is likely to prove difficult as foreign companies with sufficient funds are focusing on buying U.S. carmakers' assets.

 

With the situation deteriorating and the chances of the company surviving becoming slimmer, the government is said to be already drawing up support plans with the worst case scenario in mind.

 

 

Source: The Korea Herald