[Report] Chilly Parking Lot, Anxious Faces... Yet the Factory Kept Running

On the 17th, Visiting Ssangyong Motor Pyeongtaek Headquarters
"Bodies Working but Atmosphere Heavy"
Sharing Statements from Government and KDB, Staying Alert

[Asia Economy Reporter Kim Ji-hee] "We are just waiting for the government's decision."

On the 17th, a day before the government’s call for applications for the Industrial Stability Fund (ISF), the main gate of Ssangyong Motor's headquarters in Pyeongtaek, Gyeonggi Province, showed a usual scene around noon just after lunchtime, with dozens of 10-ton trucks carrying automotive parts and materials coming and going. However, despite the ordinary daily routine, the anxiety felt by Ssangyong Motor employees was considerable.

An employee who has worked at Ssangyong Motor for 14 years sighed, saying, "Everyone is working because the cars still need to be made, but overall, the atmosphere is heavy and gloomy." It is said that the Pyeongtaek plant lost its vitality after Pawan Goenka, Chairman of Mahindra & Mahindra in India, hinted at the possibility of selling shares by stating on the 12th (local time) that "Ssangyong Motor needs a new investor."

With Mahindra, the major shareholder holding 75% of the shares, stepping back, Ssangyong Motor is actively seeking a new owner. This is the first time in nine years since Mahindra acquired the company in 2011. An employee working at an in-house partner company at the Pyeongtaek plant expressed mixed feelings, saying, "In 2004 it was Shanghai Automotive, in 2011 it was Mahindra, and the company keeps changing hands in less than ten years, so it’s a complicated feeling." He added, "When the owner changes, there will definitely be restructuring, and the scars of such internal wounds are very deep." He also said, "Many people feel that their trust in Mahindra, which they believed in, has been broken due to this incident, so they are stuck in a situation where they can neither do this nor that."

The employees are pinning their hopes on support from the government and the Korea Development Bank (KDB). Without an emergency bailout, Ssangyong Motor practically has no 'Plan B' to overcome the current crisis. A production worker who has worked at Ssangyong Motor for over 25 years hinted, "There is a possibility that the government will provide about 200 billion won in support, so everyone is sharing related news articles in real time and just waiting for that." He continued, "Neither the company nor the labor union has clearly explained the current situation to the field, but isn’t there really nothing the company or union can do?"

The labor union is also taking a wait-and-see approach. A union official said, "Unlike in April, Mahindra has not sent any official letters to the union or the company, and since the government’s position, including KDB’s, has not been formalized, it is difficult to respond based on mere possibilities. We are currently verifying the facts and checking the atmosphere on the ground," he said.

Despite the difficult situation, Ssangyong Motor was continuing preparations for new cars and contemplating the 'post-crisis' phase. Near the Pyeongtaek plant that day, a vehicle presumed to be a test car of the long-body version of the Tivoli, called the Tivoli Air, expected to be re-released in the second half of this year, was also seen running. "Good cars must be developed steadily. When the Korando came out, and when the Tivoli came out, the whole company regained vitality." Even if the government support puts out the immediate fire, employees clearly recognized that without competitive new cars, the crisis could repeat itself.

Hong Ki-won, a member of the Democratic Party representing the Pyeongtaek Gap constituency, emphasized, "Ssangyong Motor has a very large impact on the Pyeongtaek economy, with 10,000 directly employed personnel and tens of thousands more related workers. Various forms of financial support are urgently needed, including the ISF, extension of loan maturities from KDB as a creditor, and additional funding for new car development."

The new car parking space waiting at one corner of the Pyeongtaek plant was about half empty, making the crisis at Ssangyong Motor palpable. Later that afternoon, news came that KDB stated Ssangyong Motor does not currently qualify for ISF support, which further dampened the atmosphere at the plant.

It is not only the headquarters employees who are anxious as Ssangyong Motor faces a crisis threatening its survival. At frontline dealerships, customer inquiries expressing concerns about Ssangyong Motor’s future have been increasing. A representative of a Ssangyong Motor dealership in Seoul said, "Every time Mahindra’s remarks become an issue, we receive inquiries asking if it is still okay to purchase Ssangyong Motor vehicles," conveying the mood.

This content was produced with the assistance of AI translation services.