Ssangyong occupation update: August 2, 2009

From the Korea Times (with an obvious pro-company bias):

08-02-2009 18:15
Ssangyong Faces Liquidation After Labor Talks Fail

By Kim Rahn, Park Si-soo
Staff Reporters

Troubled Ssangyong Motor faces liquidation after last-ditch negotiations between management and union members representing laid-off workers collapsed Sunday.

Park Young-tae of Ssangyong management said there will be no more talks with the union unless it modifies its position.

The announcement came hours after the two sides were unable to reach an agreement in their four-day talks marathon on the number of layoffs.

"We proposed that we will guarantee 390 jobs, 40 percent of the laid-off employees, through leave without pay and by switching workers to salesmen, but the union insisted on a 100 percent job guarantee, which management could not accept," Park said.

He said the future of Ssangyong will be decided in accordance with the law and principle, indicating police may be asked to disperse occupants of the plant.

Park also said that 4,600 retained workers would enter the factory soon to resume production, raising concerns over clashes between laid-off and retained workers.

Unless the situation at the plant returns to normal, management will seek liquidation, Park said. "We will submit a new self-rescue plan, which will be for bankruptcy, not for merger and acquisition. It will be a procedure for liquidation," he said.

Creditors have already said that they will ask the court to liquidate the plant unless production resumes by Wednesday.

The union said, "We cannot tolerate dismissal of any of the 700 workers, who have struggled together for over two months."

But both sides expressed hope, saying they still want peaceful resolution of the dispute for the revival of the company. Ssangyong sustained $243 million in lost production due to the stoppage of operations, according to the carmaker.

Even if a dramatic accord is reached, many analysts are skeptical about the chances of Ssangyong's survival.

Many of the retained workers say plant normalization might be possible, but that restoring chilled relations with the dismissed could be all but impossible.

"They wielded steel pipes and even shot pieces of metal at their longtime colleagues," said one employee who has worked at the paint shop for two decades. "I know they are in a desperate situation. But how could they take such action against us. I don't want to stay in the same room as them." Dozens of his colleagues standing nearby nodded.

Ending the occupation doesn't necessarily mean the normalization of production, Ssangyong executives and employees said.

A production executive said it would take around two weeks to resume full operations, but added, "Full capacity will only be resumed from October at the earliest."

But he also questioned whether parts supply deliveries will be made on time.

Choi Byeong-hoon, a spokesman for Ssangyong creditors, said, "Except for 250 'big' Ssangyong parts suppliers, the other 1,900 smaller and marginal subcontractors are on the verge of going under, or have already gone bankrupt."

How well Ssangyong vehicles will sell here is doubtful as drivers will have second thoughts on buying Ssangyong cars in the future.

"This is the point that concerns us most," said a Ssangyong executive. "If our marketability is not restored soon, we will soon see funds needed to develop new cars dry up. This will lead to an exodus of investors in our company, which could cause greater damage than the standoff."

Additionally, it is feared that labor-management relations could also hamper future growth.

According to researchers, many computers containing confidential information on new vehicles have gone missing.

"Nobody knows where they are," one said. "I think launching any new model on schedule will now be very difficult."