Unionized workers at South Korea’s Ssangyong Motor Co. Ltd. stage a massive demonstration at the main assembly plant and company headquarters in Pyongtaek and an engine plant in Changwon today in an effort to keep management from holding restructuring talks with creditors.
The workers moved into both plants and locked the doors in retaliation to management’s threat to lock them out if they did not stop demonstrations.
Protests began when workers walked off the job May 21, shutting down all production operations. The demonstrations resumed today in greater force.
Ssangyong’s union is demanding management scale back its restructuring plan that calls for job cuts for 2,646 employees, or roughly 36% of the 7,100-member work force, by June 1.
Management has offered an early retirement plan, but only 1,000 employees have opted to voluntarily leave the company.
Union officials contend cutting 1,600 more jobs over and above the retirement reduction is excessive, but management has maintains the reduction is necessary to make the auto maker viable. Unless the cuts are made, creditors likely will vote to sell all of Ssangyong’s assets, officials say.
Ssangyong lost 709.7 billion won ($570.5 million) in 2008 on sales of 2.5 trillion won ($2 billion). In first-quarter 2009, unit sales dropped 76% from year-ago on a volume of only 5,471 vehicles worldwide, and the company finished 265 billion won ($213 million) in the red.
China’s Shanghai Automotive Industries Corp. owns 51% of the Ssangyong’s stock. However,had to transfer management of the company to court-appointed trustees when the Korean auto maker sought court protection from its creditors in a bankruptcy filing in February.
A Ssangyong spokesman tells Wards management and creditors held their meeting in Seoul Central District Court Friday, despite the worker blockade at the plants. The court asked Ssangyong to provide a new reorganization plan by Sept. 15, the spokesman says.
That plan will have to include greater detail on the degree of economic harm caused if Ssangyong assets are liquidated.
The spokesman says Ssangyong management remains committed to the planned job cuts.