Filed under: China, Hirings/Firings/Layoffs, Earnings/Financials
Ssangyong gets bailout from SAIC
It may not be the entire 320 billion won that its largest creditor was looking for, but Shanghai Automotive Industries Corp's recent announcement that it would prop Ssangyong up with an investment of 25.9 billion won ($19.89 million) should do the trick. SAIC says the money is to facilitate the development of new products, but we'd guess that paying the Korean automaker's employees for their services will probably take top priority. According to the unionized workers for Ssangyong, which is Korea's fifth-largest automaker, a total of 29 billion won is owed to employees.The union and SAIC appear to be posturing back and forth on how to proceed from here. Ssangyong's Chinese owners want to cut a total of 2,000 jobs from the Korean automaker before investing any further money and the union is expected to vote on this new plan, which is widely expected to fail. After reporting a staggering sales drop of over 50% last year, though, something's got to give.
[Source: Gasgoo]
Reader Comments (Page 1 of 1)
imoore 10:09AM (1/06/2009)
SAIC changed their minds about propping up Ssangyong? What changed their minds? Perhaps one or more of the following suggestions:
1. Their ruse of stripping and flipping Ssangyong for its automotive technology to fund its failing home maraket brands (Roewe and MG) was exposed and it had no choice but to save face.
2. They discovered Korea's auto workers' union was more powerful than they bargained for.
3. The South Korean government called SAIC's bluff and SAIC relented.
4. SAIC's top officers read the Autoblog postings and realized that its readers are smarter than expected, so rather than risk being exposed for the disonest crooks they are, SAIC sought to make themselves look good and decided to save Ssangyong by bailing it out.
However, we haven't heard the last of this. I'll give them at least 6 months before SAIC tries again to sack Ssangyong.
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compy386 11:03AM (1/06/2009)
I don't know too much about this case in particular but how is SAIC being a crook by allowing Ssangyong to fail. Buying a company and stripping it is not against the law and it's what happens in a lot of cases. I also don't know what the union can do. I'm guessing the ownership of Ssangyong is limited liability so unless the union can prove SAIC took techonlogy from Ssangyong without properly paying Ssangyong then they really have no case. I would imagine a case like that would be impossible to win in Korea since pyramid ownership schemes are really popular there.
tekd 4:49PM (1/07/2009)
Ruse? I don't think there's any ruse about getting technology and brands by buying other companies, why else would SAIC buy other companies?
Anyways, they haven't stopped manufacturing in England, but then again they aren't have the problems that Ssangyong has in Korea. In all honesty Ssangyong wasn't the most competitive Korean car manufacturer anyway-it's not like they got bought by SAIC because they were kicking a lot of butt at home.
dukeisduke 10:32AM (1/06/2009)
It's about time they stepped up.
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jeff 11:07AM (1/06/2009)
imoore :
How ignorant or arrogant you are! The trouble of Ssangyong is quite the same as GM: the union , SUVs with high fuel consumption, and worldwide financial crash.SAIC drop in the same situation as American investors who hold GM stocks. SAIC's partners such as VW provide far more advanced technologies, so why Ssangyong? Stripping SSangyong technologies? It's a joke! Perhaps some Koreans use it to hide their failure, just as some Americans. Sorry.
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Swede 11:19AM (1/06/2009)
Please explain how this is the employees fault.
imoore 12:02PM (1/06/2009)
Ignorant/arrogant because I know what I'm talking about? If so, then I wear that label proudly.
jsjs 1:56PM (1/06/2009)
Many Chinese auto manufacturers have joint-ventures w/ more advanced auto-makers (GM, Ford, VW, Honda, Hyundai, Toyota, etc.), but that doesn't mean that the Chinese auto makers in the JVs now have the most advanced technological know-how or maybe more importantly, the top manufacturing techniques to ensure quality and efficiency.
Richard S. 11:24AM (1/06/2009)
SAIC could have used Ssangyong to get access to the restricted South Korean car market which is a big market on its own. Similar to GM using Daewoo to sell cars in Korea.
Either SAIC a) could not get the plan right, or b) Ssangyong is not a popular brand in Korea so why invest in a brand no one wants, or c) Korea is easing on imports restrictions so SAIC can export directly from China, so no need for Ssangyong.
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