By Kim Tong-hyung
Staff Reporter
Struggling carmaker Ssangyong Motor shut down its main factory in Pyeongtaek, Gyeonggi Province, Sunday because of a strike by workers resisting the company's plans to slash over 2,600 jobs.
The strike was set to reach its 12th day today, and with workers vowing to fight the lockout, tension is expected to grow in what has already been a fierce labor dispute, which saw a 41-year-old union member die of a cerebral hemorrhage.
The company, which has been refusing to talk with union officials, said it will request police intervention should the workers refuse to leave the plant.
``The lockout was an inevitable decision, as the union has been blocking office personnel from entering the Pyeongtaek factory and forcing a complete halt of industrial activities since the strike started on May 21. We concluded that the business losses related to these actions were severe enough to threaten the company's survival,'' the company said in a statement.
Ssangyong, South Korea's smallest automaker, has been under bankruptcy protection since February and was thrown a lifeline by a local court earlier this month when its restructuring plan was approved.
The automaker, 51-percent-owned by China's Shanghai Automotive Industry Corp. (SAIC), lost 265 billion won (about $211 million) during the first quarter of the year, compared to the net loss of 34 billion won a year earlier.
Since the company announced the restructuring plans earlier this month, more than 1,400 workers have accepted redundancy packages.
The 2,646 jobs Ssangyong promised to shed accounts for more than one-third of its workforce. The restructuring will enable the company to receive 330 billion won in new loans with its Pyeongtaek plant offered as collateral.
Ssangyong's fall has been the biggest industrial casualty the economy has seen in years and is putting further strain on the local auto industry, which is reeling from collapsed global demand amid the economic turmoil.
Large passenger cars and sports utility vehicles (SUVs) have traditionally been the bread and butter for Ssangyong, not exactly a formula for success in this kind of economy which has consumers refusing to touch gas guzzlers with a barge pole.
Ssangyong's labor union is arguing that trimming payrolls isn't the answer for the company's long-term survival and calls for the government and the state-run Korea Development Bank to spend more on the company to keep it afloat. According to the union, the firm needs an injection of around 880 billion won this year alone.
The union also claims that SAIC should be forced to give up its shares should it fail to show any commitment for further investment.
Aside from spending 590.9 billion won to acquire Ssangyong in 2004, SAIC has refrained from making significant investments into the Korean company, despite apparently gaining core technologies for making SUVs and diesel hybrid cars, the union said.
However, it's debatable whether or not any attempt to save Ssangyong, which clearly lost its competitiveness over the years, wouldn't end up a lost cause.