Even Local Areas Join 'Saving Ssangyong Motor'... Self-Help Efforts Include 'Considering 30% Reduction in Executives'

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] As the local government of Pyeongtaek City, where the headquarters is located, and the political circles step up to save Ssangyong Motor, which has entered rehabilitation proceedings, attention is focused on the self-help efforts Ssangyong Motor will choose. First, Ssangyong Motor is reportedly considering a plan to reduce about 30% of its executives as part of fixed cost reduction and organizational slimming.

According to the industry on the 25th, Ssangyong Motor is reviewing a plan to consolidate some organizations and reduce the number of executives by about 30%. As of the end of last month, Ssangyong Motor had 33 executives, and about 10 of them, excluding recently resigned President Ye Byeong-tae and court-appointed manager Jeong Yong-won, are expected to step down.

In the industry, it is anticipated that the management will first reduce the number of executives and then ask the labor union to cooperate in restructuring as part of sharing the pain. However, in this case, restructuring is expected to be carried out primarily by reducing wages rather than artificial workforce cuts.

The Ssangyong Motor labor union stated at the first meeting of the Ssangyong Motor labor-management-civil-government cooperation body on the 21st, "The union will actively cooperate with the management to ensure that the corporate rehabilitation process proceeds well through court management," but also demanded job security, saying, "The union's sacrifice should not be forced alone." Ssangyong Motor reduced employee wages by about 20% last year amid a liquidity crisis by deferring payment, and this year, only 50% of employee wages are being paid.

The local government of Pyeongtaek City, where Ssangyong Motor's headquarters is located, and political circles are also conducting a campaign to save Ssangyong Motor. Since the 20th, Pyeongtaek City has formed the 'Ssangyong Motor Saving Pan-Citizen Countermeasures Committee' to seek ways to assist in the early normalization of Ssangyong Motor in the Pyeongtaek area. Various measures and support activities such as signature campaigns for Ssangyong Motor's normalization, social network service (SNS) relay campaigns, Ssangyong Motor purchasing campaigns, and financial support for Ssangyong Motor and its partner companies will be carried out.

The trade creditor group composed of partner companies plans to urge foreign parts suppliers to resume deliveries and the government to provide financial support on the 26th. Ssangyong Motor stopped operations from the 8th to the 16th due to semiconductor parts supply issues and again halted the factory from the 19th to the 23rd due to suspension of parts supply from partner companies.

Meanwhile, Ssangyong Motor's rehabilitation process proceeds in the order of submission of creditor lists, creditor investigation, submission of investigation committee reports, explanation meetings for stakeholders, submission of rehabilitation plans, stakeholder meetings, approval decisions on rehabilitation plans, and decisions to conclude rehabilitation plans.

[Image source=Yonhap News]

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