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Posted : 2008-12-25 17:30
Updated : 2008-12-25 17:30

Tech Leak Pits Union Against Ssangyong Owner

By Oh Young-jin, Kim Hyun-cheol
Staff Reporters

The union of the troubled Ssangyong Motors is planning to sue the carmaker's Chinese parent company, Shanghai Automotive Industry Corp. (SAIC), for transferring key technologies back to China in violation of a Korean law barring such acts. Meanwhile, the Korean government is sticking to its position of not providing liquidity to Ssangyong, or other Korean or foreign carmakers.

In a telephone interview with The Korea Times, Han Sang-kyun, the union leader, said, ``We are planning to take SAIC to court. We have acquired enough evidence of their illegal activities.''

Han said that the timing would most likely be early or mid-January, adding, ``We are consulting with lawyers about the venue of legal action,'' he said, when asked whether he will sue China's major carmaker in Korea, China or at an international court.

There have been incessant rumors about high technology leaks to China from Ssangyong Motors, often raised by the union.

Han's remark comes at a time when SAIC gave an ultimatum to the union to accept its restructuring plan or face the parent company's withdrawal, which, if implemented, would mean certain bankruptcy.

A Ssangyong union spokesman said the union considered SAIC's ultimatum a threat. ``I believe that it is intended to put pressure on the Korean government as well as us.''

``We are reviewing all possible forms of protest with legal action included,'' he said. ``SAIC's action is a blow under the belt, taking advantage of the current difficult situation facing the automotive industry to push ahead with its agenda.'' He added that the union is planning to hold a news conference.

The Ministry of Knowledge Economy said that there will be no liquidity provision at the government level for five automakers ― Hyundai, Kia, GM Daewoo, Samsung Renault and Ssangyong.

``We have no plans to inject liquidity into the carmakers,'' a ministry official said. ``It has been repeatedly made clear.'' He said that either the minister or vice minister is expected to meet the visiting a SAIC delegation Friday.

Regarding the Ssangyong union's move to sue its Chinese parent company, the ministry official expressed doubt on the legality of the union's suit.

Choi Sang-jin, senior Ssangyong public affairs officer, commented that the company is finalizing its rationalization program, but refused to comment on whether there would be a change in job eliminations.

During a private meeting Tuesday, Choi Hyung-tak, the Korean chief executive officer (CEO) of the troubled carmaker, told Rep. Jeong Jang-seon of the main opposition Democratic Party of SAIC's ultimatum, which was leaked to the media.

There have been reports that SAIC also tried to enlist the help of the Korean government in downsizing Ssangyong, which has faced fierce opposition from the union.

Ssangyong has been particularly hard hit by the ongoing difficulties facing the automotive industry, because of a labor-management dispute, as well as its lineup of vehicles that are mainly gas-guzzling SUVs.

The carmaker recorded fourth straight quarterly losses ― with red ink of $20.8 million ― in the third quarter. Also during the July to September period, sales dropped 63 percent to 3,835 vehicles. Its production lines have been idle since Dec. 17 as part of efforts to reduce its inventory. The automaker has halted production twice previously this year.

foolsdie@koreatimes.co.kr
hckim@koreatimes.co.kr

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