During Sale Negotiations to Liquidity Cliff... Ssangyong Motor Labor and Management Hold Wage-Related Meeting

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] On the 22nd, the labor and management of Ssangyong Motor, facing a liquidity crisis and unpaid wages, sat at the negotiation table regarding the payment of wages for January and February.

From 9:30 a.m. on the same day, Ssangyong Motor's labor and management held a meeting with delegates from the majority union, the company union, to discuss the current financial situation and the partial delay in wage payments. The management delivered an official letter to the union the previous day stating, "Due to the liquidity crisis, it is difficult to pay wages normally for January and February, so let's negotiate between labor and management." The union plans to decide whether to cooperate after listening to the management's explanation and conducting internal discussions during the meeting.

Industry insiders believe that after Ssangyong Motor filed for corporate rehabilitation, some suppliers refused to supply parts and demanded cash payments, further worsening the liquidity crisis. Earlier, Ssangyong Motor applied for corporate rehabilitation on December 21 last year due to liquidity problems, and the court accepted Ssangyong Motor's Autonomous Restructuring Support (ARS) program, postponing the commencement of rehabilitation proceedings until February 28. Due to suppliers' refusal to supply parts over concerns about not receiving payment, Ssangyong Motor halted operations at the Pyeongtaek plant on the 24th and 28th of last month. Domestic major parts companies such as Hyundai Mobis resumed parts supply, but foreign parts companies like BorgWarner Ochang (T/C assembly) and Continental Automotive (combimeter) expressed refusal to supply. Consequently, Ssangyong Motor has been receiving parts by paying cash daily without extending official supply contracts.

Moreover, the union is also facing a decision regarding the demands of Lee Dong-geol, chairman of the Korea Development Bank. On the 12th, Chairman Lee proposed conditions for supporting Ssangyong Motor to the union, including maintaining wages and collective agreements for three years and no labor disputes until turning a profit. Since the 22nd is the negotiation deadline proposed by HAAH Automotive, the U.S. automotive distributor and the current acquisition candidate for Ssangyong Motor, the union meeting is expected to include Q&A sessions about the progress of the sale.

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