[Report] Visiting the Stalled Ssangyong Motor Factory: "Everyone is Anxious... But We Believe the Negotiations Will Go Well"

Calm Atmosphere Amid Staff Tension
Concerns Over Community Losing Vitality
Partners "Can No Longer Endure, Government Support Urgently Needed"

The Ssangyong Motor plant in Pyeongtaek, Gyeonggi Province, was quiet on the morning of the 4th. (Pyeongtaek = Photo by Yu Je-hoon)

[Pyeongtaek=Asia Economy Reporter Yoo Je-hoon] At 6:40 a.m. on the 4th, the front gate of Ssangyong Motor’s factory in Pyeongtaek, Gyeonggi Province, was filled only with silence.

The sidewalk in front of the main gate, which would normally be crowded with commuters due to the two-shift work starting at 7 a.m., was deserted. The snow that fell the previous day still lay untouched on the sidewalk. Only a few office workers heading to work were visible. At 7 a.m., the factory’s operation start bell rang, but only the sound of cars passing on the nearby road could be heard.

A Ssangyong Motor office worker in his 40s, who was on his way to work, said, "I don’t know much about the negotiation situation, but I believe it will turn out well," adding, "Everyone seems to be calmly waiting for the results." Another worker in his 20s from a partner company sighed, saying, "Since the factory isn’t operating, it’s naturally quiet," and "Everyone is anxious because no one knows what will happen next."

Ssangyong Motor announced on the 2nd that "production will be suspended until the 5th due to supply disruptions of production parts caused by partner companies’ refusal to deliver."

The problem is that the resumption of factory operations next week is also uncertain. The potential investor HAAH Automotive has left the country, and even KDB Industrial Bank expressed reluctance to support, stating that HAAH left Korea without submitting investment plans and other documents.

The Ssangyong Motor plant in Pyeongtaek, Gyeonggi Province, was quiet on the morning of the 4th. (Pyeongtaek = Photo by Yoo Je-hoon)

Concerns Over Loss of Vitality in Nearby Commercial District

Local merchants also expressed concerns that the commercial district might lose its vitality as Ssangyong Motor faces difficulties again.

A Mr. A, who has been running a restaurant in front of Ssangyong Motor’s main gate for five years, said, "We were already hit hard by the COVID-19 pandemic, and now with Ssangyong Motor struggling, I am very worried," adding, "I just hope the situation is resolved well."

Mr. B (52, male), a Pyeongtaek resident met near the factory, explained, "When Ssangyong Motor was doing well in the past, the Pyeongtaek economy was thriving, but recently the atmosphere has not been good," and added, "At least Samsung Electronics is holding on by building a large campus in Pyeongtaek."

The semiconductor factory that Samsung Electronics is building in Pyeongtaek, the largest in the world, is located near the Ssangyong Motor factory. While Ssangyong Motor employees received only about 50% of their usual salary this month due to financial difficulties, Samsung Electronics semiconductor employees received nearly half of their annual bonus this month, showing a stark contrast.

The partner companies of Ssangyong Motor are under severe pressure. Company S, with 30 years of experience, supplies automotive parts to Ssangyong Motor and relies mostly on Ssangyong Motor for its sales.

The crisis at Ssangyong Motor inevitably translates into a crisis for the company. The CEO of Company S lamented, "With zero sales, it is even difficult to repay various payments that will come back," and said, "I don’t know how much longer we can hold on."

Ssangyong Motor emphasized that it is continuing efforts to normalize management through the P-Plan. The P-Plan, a short-term court management plan submitted in advance, can reduce the time required for rehabilitation compared to general court management. A Ssangyong Motor official stated on the day, "We are currently in discussions with the Mahindra Group and potential investors regarding procedures related to the P-Plan to ensure smooth progress."

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