Ssangyong makes major comeback

The Korea Times

The Korea Times

National

Wed, September 27, 2023 | 17:25

Ssangyong makes major comeback

Posted : 2013-08-29 15:51

Updated : 2013-08-29 15:51

Workers assemble a vehicle at Ssangyong Motor's Pyeongtaek factory in Gyeonggi Province. / Courtesy of Ssangyong Motor

Automaker sees robusts sales growth

By Kim Tae-jong

PYEONGTAEK, Gyeonggi Province ㅡ Won Yoo-sang, a 42-year-old factory worker at Ssangyong Motor, feels tired following months of overtime and hot weather.

But he says he has never been happier in his 19-years with the firm because it is fast moving toward business normalization.

"This will be the best season ever," he said proudly. "I'm really happy that the company is getting better with sales growing fast, and there is continuous overtime work to meet growing demand."

He said all his colleagues are full of hope and highly motivated, now that they have gotten through the worst crisis.

The firm was put into court receivership in the wake of the 2008 global financial crisis. It laid off 2,600 workers in 2009, which triggered the fiercest labor strife since the 1980s.

But now, the company is cited as a an example of a company with a good relationship between management and union to get back on track and finally produce a desirable outcome.

In fact, Ssangyong was the only automotive company that recorded growth among domestic automakers despite a sluggish market in this sector in the first half.

It has taken steps for normalization with growing sales in the past year. It revived an overnight shift on one of three assembly lines at its plant here after reinstating in March some 460 workers who had been on unpaid leave for the past four years.

As a result, Ssangyong recently reported a quarterly profit for the first time in six years ㅡ since the third quarter of 2007. The only exception was for the third quarter of 2010, when there was a profit on account of gain from the disposal of idle assets worth 112.5 billion won during the rehabilitation process.

Workers at Ssangyong attributed the encouraging results to mutual trust and cooperation between management and employees.

Last month, the firm concluded a wage bargaining agreement for 2013 without experiencing any labor disputes, recording the fourth strike-free year of negotiations since 2010.

"I think we gained much from the agreement, given the firm's business conditions," said Park Hyo-sung, another assembly worker at the firm. "We know that we can get more if the business is better."

He said that employees now have stronger "team spirit" and are together seeking ways of helping the firm get back on track.

He said he knew all too well what it is like to lose a job. The 42-year-old was one of 455 workers who took leave of absence without pay on condition that they would be reinstated when the firm's business normalized. This was at a time when the firm had to let go of 2,600 workers. Of these, some 1,900 chose to retire and the rest were dismissed.

"It was a whole new world when I came back," he said. "I plan on working very hard, which I think will help in other colleagues being reinstated soon."

The case of Ssangyong can be a good lesson to the local auto industry which often suffers from labor disputes and production stoppages.

For example, workers of Hyundai Motor recently staged a series of partial strikes after union representatives and management failed to narrow their differences over a proposal for collective bargaining presented by the former group.

But the move has drawn criticism because their demands, which many consider as "excessive" and "unreasonable," could damage the automaker's competitiveness in the midst of growing concerns over a possible downturn in the automotive industry.

"Exports are critical to local automakers because the domestic market is too small," said Ha Kwang-yong, production HQ executive director at Ssangyong. "Hyundai's strikes will only damage their global competitiveness."

He said that the Korean auto industry will face a setback if excessive labor activities, including strikes, continue as they did in France and Italy in the past.

"Management and laborers should seek a way of achieving mutual prosperity like automakers in Germany," he said. "Our recent revival would have been impossible without mutual understanding and cooperation between management and labor."

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