Revival Will Highlighted as Ssangyong Motor's Self-Rescue Plan Passes... Financial Support Signal Green

Possibility of Financial Support for Ssangyong Motor's Business Normalization Gains Weight

[Asia Economy Reporter Park Sun-mi] Ssangyong Motor is entering negotiations on methods to implement unpaid leave following the labor union's decision to accept the self-help plan, while the possibility of receiving financial support to urgently put out the fire of funding is also gaining weight.

According to the financial sector on the 10th, the Korea Development Bank (KDB) plans to announce its position on current issues such as the passage of Ssangyong Motor's self-help plan through a press briefing early next week. The industry expects that since Ssangyong Motor has secured justification to receive financial support from KDB by accepting the labor union's self-help plan, the bank will deliver a positive message regarding financial support for Ssangyong Motor.

At the beginning of the year, KDB Chairman Lee Dong-geol presented the preconditions for financial support to Ssangyong Motor as the conclusion of a three-year collective agreement and the suspension of labor disputes by the union until profitability is achieved. At that time, Chairman Lee stated that if Ssangyong Motor did not comply, not a single won would be supported.

According to the self-help plan confirmed through a referendum among union members this time, most of KDB's requests are included. Although it is not a workforce restructuring, Ssangyong Motor has decided to implement unpaid leave for up to two years for 50% of technical staff and 30% of office workers. The unpaid leave is expected to begin as early as next month.

Additionally, Ssangyong Motor's labor and management agreed to extend the collective agreement revision cycle from two years to three years and to refrain from strikes until business normalization. By strongly demonstrating their will to revive, Ssangyong Motor's labor and management have secured at least the minimum justification to receive financial support from KDB.

Ssangyong Motor, currently undergoing corporate rehabilitation procedures, plans to issue a bidding announcement at the end of this month and begin full-scale mergers and acquisitions (M&A) procedures. Since HAAH Automotive, which had previously expressed interest in acquiring Ssangyong Motor, made KDB's financial support a condition for acquisition, whether KDB can provide financial support for Ssangyong Motor's business normalization could be a decisive factor increasing the likelihood of successful M&A by prospective buyers.

Financial Services Commission Chairman Eun Sung-soo also met with Jeong Il-kwon, chairman of the Ssangyong Motor labor union, at the National Assembly late last month to discuss issues related to Ssangyong Motor undergoing corporate rehabilitation procedures. It is possible that the government's support for Ssangyong Motor was discussed at this meeting. Chairman Eun previously stated at the National Assembly's Political Affairs Committee plenary session in February regarding the Ssangyong Motor situation, "Since there is employment involved, if it is okay, it is better to save it."

However, although public support funds are urgently needed for Ssangyong Motor's revival, since KDB must bear the risk of insolvency due to capital injection, there is also the possibility that additional requirements for Ssangyong Motor will be conveyed through next week's press conference.

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