Ssangyong Motor Using Inventory Parts to Operate Factory, Production Halted Again from 17th to 19th (Comprehensive)

Ssangyong Motor Repeatedly Requests Parts Supply... Some Foreign and Other Partners Refuse Supply
Afternoon Briefing Held with Partner Emergency Committee on Production Normalization and P Plan

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] Ssangyong Motor, which resumed factory operations on the 16th after production disruptions throughout this month, will close its factory again after just one day.

On the 16th, Ssangyong Motor announced that it would halt operations at its Pyeongtaek plant from the 17th to the 19th due to disruptions in procuring production parts caused by suppliers refusing to deliver.

Although Ssangyong Motor operated the factory on that day using previously secured inventory parts, negotiations with suppliers refusing to deliver parts did not proceed smoothly, leading to the factory closure once again.

Ssangyong Motor had also suspended production for two days immediately after filing for corporate rehabilitation procedures last December. At the end of last month, when Ssangyong Motor failed to settle maturing promissory notes, suppliers refused to deliver parts, causing the Pyeongtaek plant to halt operations from the 3rd to the 5th and from the 8th to the 10th of this month. If the factory stops operations this time, the total number of production suspension days will reach 11 business days.

Currently, some suppliers, mainly large corporate partners and foreign parts companies, are refusing to deliver parts while demanding payment of outstanding amounts and cash payments. Ssangyong Motor employees are contacting suppliers to request the resumption of deliveries, but these requests are being rejected.

Ssangyong Motor has announced plans to resume production on the 22nd, but if suppliers continue to refuse deliveries, factory operations will remain uncertain.

On the afternoon of the same day, starting at 4 p.m., Ssangyong Motor will hold a briefing session near the Pyeongtaek plant with the Ssangyong Motor Suppliers Emergency Response Committee to discuss countermeasures. It is known that during this briefing, Ssangyong Motor and the Emergency Response Committee will engage in broad discussions on issues such as plans to normalize production, the status of sale negotiations, and procedures for proceeding with the P-Plan.

Ssangyong Motor plans to submit a preliminary rehabilitation plan to the court with the consent of creditors by the end of this month, when the decision to commence corporate rehabilitation procedures is postponed, and then proceed with the P-Plan.

The Emergency Response Committee is also expected to support efforts to persuade creditors for the submission of the P-Plan. For the P-Plan to be approved by the court, consent is required from secured creditors such as the Korea Development Bank (three-quarters), unsecured creditors (suppliers) (two-thirds), and shareholders (one-half).

Furthermore, the Emergency Response Committee plans to explore ways to persuade some suppliers who, along with Ssangyong Motor, maintain a negative stance on resuming deliveries during the meeting.

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