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| A SsangYong Motor plant in Pyeongtaek, Gyeonggi Province / Courtesy of SsangYong Motor |
By Nam Hyun-woo
SsangYong Motor is suffering an aggravated business environment, but the company sees a silver lining as it is achieving stable labor-management relations, one of the main drivers helping the company to rebound, according to industry officials, Sunday.
SsangYong Motor said its union and management agreed on two self-salvaging plans last year to help the company survive in the current downturn across the automobile industry, and to seek sustainable growth.
In the first plan, made last September, the two sides agreed to reducing or stopping 22 employee "welfare benefits" including gifts on national holidays and incentives for long-term employees. They will also encourage employees who have worked there for longer than 25 years to take sabbatical leave.
The second plan involves the company making more aggressive improvements to its balance sheet by reducing labor costs. In the plan, employees have agreed to return some of their incentives and other bonuses, and to reduce rates for annual leave payments.
Even though the plan costs an average 10 million won ($8,000) per employee, more than 90 percent of executives and employees of SsangYong Motor agreed, expressing their commitment to helping the company rebound from its tough situation.
SsangYong Motor had a thorny labor-management dispute in 2009 following mass layoffs, but has been achieving stable relations since then, reaching wage agreements annually over the past 10 years without strikes or sit-ins.
Last week, the company agreed to assign 47 employees who were sacked in 2009 and reinstated in 2018. At that time, the company reinstated 119 workers, but put 47 of them on paid leave citing management difficulties.
The decision drew a positive response as it came amid plant shutdowns stemming from parts shortages after the COVID-19 outbreak.
Industry officials said labor disputes are one of the most critical factors dragging down domestic carmakers' growth, but companies can overcome these difficulties on the basis of stable labor relations.
"Though SsangYong Motor and Hyundai Motor finished their wage negotiations without a dispute last year, some companies continue to have union showdowns, and this lost the Korean automobile industry its opportunity to become the world No. 6," Korea Automobile Manufacturers Association President Jung Man-ki said.
SsangYong Motor said its stable labor relations are providing a solid ground for the company to weather the current industrial downturn and pursue sustainable growth.
According to the company, it will seek to exploit its strategic partnership with Mahindra Group and pursue vehicle platform sharing and new car development to contain investment risks and secure cost competitiveness. The company said Mahindra, its largest stakeholder, is also considering various support plans for SsangYong to make aggressive investments.
In January, Mahindra & Mahindra Managing Director and SsangYong board Chairman Pawan Goenka visited a SsangYong plant in Pyeongtaek, Gyeonggi Province, and met with leaders of the company's union. During the meeting, he pledged Mahindra will fully serve its role and responsibility as the largest stakeholder of SsangYong.
"Based on cooperative labor relations, SsangYong will continue to pursue the shared objectives of growth and job security by securing product competitiveness and increased sales," a SsangYong Motor official said.
"Pre-emptive efforts to improve the company's cost structure will become the foundation for the company to seek sustainable growth and all members of SsangYong will spare no effort to overcome the current difficulties."
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