SME Ombudsman Urgently Requests Government Support for Ssangyong Motor Partner Companies

Park Joobong Ombudsman "Let's Solve Difficulties of 160,000 Partner Company Employees through Active Administration such as Loan Support"

Jubong Park, Small and Medium Business Ombudsman (Vice Minister level).
[Photo by Asia Economy DB]

[Asia Economy Reporter Kim Jong-hwa] The Small and Medium Business Ombudsman (vice ministerial level) has urgently proposed support measures for Ssangyong Motor’s partner companies facing financial difficulties due to the commencement of corporate rehabilitation procedures. The number of employees at Ssangyong Motor’s partner companies facing employment crises due to the start of corporate rehabilitation procedures reaches approximately 165,000.

The Small and Medium Business Ombudsman announced on the 17th that it has urgently proposed to related government ministries and local governments, including the Ministry of Trade, Industry and Energy, the Financial Services Commission, the Ministry of SMEs and Startups, Gyeonggi Province, and Pyeongtaek City, to prepare support measures for Ssangyong Motor’s partner companies.

So far, Ssangyong Motor has requested loan support from various financial institutions using 250 billion KRW of public claims as collateral for 340 partner companies. In response, the government has provided about 130 billion KRW through preferential guarantees for Ssangyong Motor’s partner companies, but only 55 out of the 340 companies have benefited.

In particular, Ssangyong Motor’s partner companies are experiencing rapidly deteriorating finances due to ongoing management difficulties, but it is difficult to receive support under existing guarantee products. Despite the government’s preferential guarantee support, an additional credit extension of around 5-10% is required from financial institutions, making loans practically unavailable for Ssangyong Motor’s partner companies.

Accordingly, Ombudsman Park Joo-bong explained the necessity of support, stating, “Since the automobile industry is a representative key industry with a significant impact on the national industry, it is urgent to prepare additional support measures such as a special government guarantee program. It is also necessary to consider the impact on the livelihoods of the 165,000 employees of the 340 partner companies and their families, as well as the regional economy.”

The Small and Medium Business Ombudsman’s proposal comprehensively covers the financial and other support measures immediately needed for the survival and business normalization of partner companies.

First, the Ministry of Trade, Industry and Energy was proposed to prepare support projects such as R&D to strengthen technological competitiveness; the Financial Services Commission was asked to consider expanding loan support for financially struggling partner companies; the Korea Credit Guarantee Fund was urged to expand funding scale and ease support conditions (increase guarantee ratio); and the Korea Development Bank was requested to extend the operation period of the key industry stabilization fund’s support program for partner companies and increase the guarantee ratio (from 90% to 100%).

Additionally, the Ministry of SMEs and Startups was proposed to devise temporary funding support plans for the business normalization of partner companies, and Gyeonggi Province and Pyeongtaek City were asked to prepare contributions and consider additional support measures to maintain the livelihoods of workers at partner companies within the province.

Ombudsman Park said, “It is heartbreaking to see the situation of the approximately 160,000 Ssangyong Motor partner company employees and executives who must be anxious ahead of Chuseok, the nation’s biggest traditional holiday. I hope that government agencies such as the Ministry of Trade, Industry and Energy, the Financial Services Commission, the Ministry of SMEs and Startups, and Gyeonggi Province, which are related parties and stakeholders in the Ssangyong Motor issue, will alleviate their difficulties through proactive administration even just a little.”

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