[Report] Visiting the Halted Ssangyong Motor Plant: "Everyone is Anxious... Hope the Negotiations Go Well"

Silent Ssangyong Motor Pyeongtaek Plant: Hope and Concern Intersect
Partner Companies Also Face Collapse Crisis "At This Rate, the Ecosystem Will Collapse"

[Asia Economy Pyeongtaek=Reporter Yoo Je-hoon] "The factory has stopped, so how could the neighborhood be anything but quiet? Everyone is anxious because no one knows what will happen next. We just hope the negotiations conclude successfully."

At 6:40 a.m. on the 4th, snow that fell overnight was piled up in front of the main gate of Ssangyong Motor’s factory in Pyeongtaek, Gyeonggi Province. Normally, the sidewalk in front of the main gate would be bustling with employees rushing to avoid being late, but it was quiet. The parking lot near the main gate was also half empty.

At 7 a.m., a signal indicating the start of operations sounded, but only the office building lights were on. Beyond the fence, only external lights were lit in the factory, and there was no sign of activity. The slogan on the building’s exterior wall, "The most innovative and respected automobile company in Korea," stood out clearly.

Ssangyong Motor is once again in crisis. There has been no progress in acquisition negotiations with the Korea Development Bank, Mahindra, and HAAH Automotive, and the factory has been shut down due to major parts suppliers refusing to deliver. Ssangyong Motor and its partner companies are appealing for support, as a significant employment crisis seems inevitable if this continues.

◆Hope and Concern Intersect on the Commute = The quiet commute this morning was because Ssangyong Motor suspended factory operations until the 5th due to parts suppliers’ refusal to deliver. About 3,500 production workers did not come to work, and only some office workers were present. A Ssangyong Motor official said, "Considering the staff working at the Seoul office and others, the number of employees working at the Pyeongtaek factory is expected to be less than 1,000."

Ssangyong Motor and partner company employees remained tight-lipped about the deadlocked negotiations. Most avoided answering, and some even waved their hands dismissively. Even so, employees expressed both hope and concern.

Employees of Ssangyong Motor and partner companies met during the morning commute were silent about the stalled acquisition negotiations. Some said, "I don’t know," while others waved their hands dismissively. Despite this, employees showed both hope and concern.

An office worker briefly said, "The atmosphere is generally calm. I don’t know much about the negotiations, but I believe things will turn out well." Another employee, who has worked at a partner company for about a year and a half, said, "Everyone is anxious because no one knows what will happen next."

◆Partner Companies Appeal: "The Ecosystem Will Collapse If This Continues" = Although the break bell rang at 9 a.m., it remained quiet. The rear gate delivery center, usually bustling with outgoing vehicles, was also quiet. Nearby, inventory vehicles waiting for delivery were lined up, but there were noticeable empty spots. A Ssangyong Motor union official said, "Due to production disruptions, the vehicle inventory is not as high as before."

The problem is that it is uncertain whether factory operations will resume next week. Potential investor HAAH Automotive has left the country, and the Korea Development Bank expressed reluctance to support, stating that HAAH left Korea without submitting investment plans.

Ssangyong Motor’s crisis is spreading to the surrounding area. Some stores located in front of the factory’s main gate are vacant. A woman who has operated a restaurant near Ssangyong Motor for five years said, "Business was never great before, but with COVID-19 and Ssangyong Motor’s shift to a two-shift production system, sales have been cut in half." Kim (52), a Pyeongtaek resident, said, "The commercial districts in Segyo-dong and Vision 2-dong, frequently visited by Ssangyong Motor employees, have been depressed for a long time. It’s fortunate that Samsung Electronics’ Pyeongtaek campus is established here."

Partner companies highly dependent on Ssangyong Motor are deeply anxious. Company A, with 30 years of experience, is a typical example. Company A supplies automotive parts to Ssangyong Motor and relies on it for most of its sales. Ssangyong Motor’s crisis inevitably translates into Company A’s crisis.

Company A has not received payment for parts for several months, and recently, with Ssangyong Motor’s factory shutdown, its sales have dropped to zero. Unable to endure further, Company A effectively closed its parts factory, which is about 9,900㎡ (3,000 pyeong) in size, a few days ago. About 150 employees are currently using their annual leave.

Company A’s CEO, Mr. B, said, "The annual leave will run out by mid to late this month, and after that, we will have to choose unpaid leave, but we cannot sustain it for long." He added, "Even if Ssangyong Motor restarts operations later, if the current situation continues, the partner companies’ ecosystem could collapse due to workforce loss. The government needs to provide financial support to help partner companies survive, and large corporations or foreign parts suppliers should also help Ssangyong Motor’s factory to resume operations."

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 said, "We are currently discussing P-Plan procedures with the Mahindra Group and potential investors to ensure smooth implementation of the P-Plan."

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