SEOUL, Apr 13, 2009 (AsiaPulse via COMTEX)
The labor union of troubled Ssangyong Motor Co. (KSE:003620) said Friday it has called thousands of its members to strike against a massive job-cut plan, which the company says is necessary for a survival.
Ssangyong, under bankruptcy protection and 51 per cent owned by China's top automaker Shanghai Automotive Industry Corp. (SAIC), said it would slash 2,646 jobs, or 37 per cent of its total workforce, to prove its viability.
The job-cut plan, announced on Wednesday, marked the first large-scale layoffs by a South Korean company since the global economic crisis depressed sales of domestic automakers in late last year.
Walloped by collapsing sales and dwindling cash reserves, Ssangyong was forced to seek bankruptcy protection in January after SAIC abandoned it without showing any major effort to save its affiliate.
The Ssangyong union, which has some 5,100 members out of its 7,100-strong workforce, has accused SAIC of simply abandoning the company as the market turned sour while stealing the company's technology by exploiting its position as an owner.
"We will stage a full-scale strike with an unimaginable scale," said an official at the Ssangyong union.
On Monday, unionized workers at Ssangyong will vote on the strike call, the official said.
If the union strikes, it would further complicate Ssangyong's efforts to turn itself around, analysts say.
On May 22, a bankruptcy judge at the Seoul Central District Court will meet creditors of Ssangyong and its debt holders to decide on the viability of the automaker.
Ssangyong, which has an annual production capacity of 200,000 vehicles, posted a net loss of 709.7 billion won (US$538.3 million) in 2008 on sales of 2.5 trillion won, down 20 per cent from a year earlier.
In the first three months of this year, Ssangyong's vehicle sales nosedived 76 per cent to 6,471 units.
(Yonhap)
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