Ssangyong Launching Partial Output at Damaged Pyeongtaek Plant

Ssangyong Motor Co. Ltd. plans to restart production at its Pyeongtaek, South Korea, plant Aug. 13.

The facility was under siege during an often-violent 77-day sit-in strike by discharged workers, which ended last week. Gyeonggi province police are seeking arrest warrants for 44 individuals who were inside the plant. The violence reportedly cost Ssangyong about 316 billion won ($258 million) in production losses.

“Damage in the various departments has not been as bad as anticipated, and we have now tested out all production equipment – working straight through the weekend,” a spokesman tells Ward’s.

Output is anticipated to quickly ramp up to more than 2,000 vehicles by late August, with a target of 4,000 to be built in September.

The spokesman declines to comment on a media report that quotes a Korea Development Bank official as saying the bank has agreed to provide Ssangyong with 130 billion won ($104 million) of the 150 billion won ($120 million) in emergency funding the auto maker applied for to help finance costs during its restructuring period.

The restructuring costs include severance pay for more than 2,000 workers who have been placed on early retirement.

The report says the KDB has agreed to let Ssangyong use its engine plant and engine-development center in Changwon as collateral.

Ssangyong already owes the KDB about 240 billion won ($193 million) for loans using the Pyongtaek plant as collateral, sources say.

The Korean government has said it will indirectly assist Ssangyong by declaring the Pyeongtaek metropolitan zone as an economic-disaster area or special-employment zone.

The labor ministry will funnel some 50.5 billion won ($41 million) to the area to assist workers in finding new jobs, as well as help businesses impacted by the Ssangyong restructuring, including suppliers.

It is the first application of the special-employment zone policy since it was authorized by a federal act four years ago.