SAIC Denies Stealing From Ssangyong
By Kim Hyun-cheol
Staff Reporter
In the run-up to the announcement by Korean prosecutors of their investigation results, Ssangyong Motor's Chinese parent firm Thursday denied allegations by Ssangyong unionists that it had stolen core technology. The union is threatening to file a criminal charge against SAIC after it pulled out of Korea, putting Ssangyong under court receivership.
Shanghai Automotive Industry Corp. (SAIC) also said in a statement it had made no official pledge to invest $1 billion in its Korean unit as claimed by Ssangyong.
``The Korean prosecution claims technology on a diesel hybrid engine has been transferred from Ssangyong, but SAIC is currently developing a gasoline hybrid engine. There should be a clear line between the two,'' said the automaker, stressing the two projects are incompatible and there is no reason for SAIC to steal technology from Ssangyong.
China's second biggest automaker also pointed out a gap in the development phases of the two projects, with its own gasoline hybrid engine going into mass production in 2010, while Ssangyong is in the conceptualization stage. It attributed the allegations to Korean prejudice against foreign investors.
``The main body of investment should be from Ssangyong as specified in Ssangyong's long-term management plan in 2006, not SAIC,'' the Chinese company said, explaining that it was not obligated to cough up money for Ssangyong from its own pockets.
Korean prosecutors have completed investigations but are apparently waiting to decide how and when it will disclose the results.
Any formal charges against SAIC are expected to lead to spats between the two countries.
Reports suggest that the Ministry of Knowledge Economy has recently told prosecutors that the Ssangyong technology in question is ``not critical.''
SAIC's statement, however, didn't refer to sports utility vehicles (SUV)-related Ssangyong technology.
Soon after taking over Ssangyong in 2005, SAIC started the ``L Project,'' in which it used the Kyron SUV technology, agreeing to pay 24 billion won ($17.4 million) in royalties and used it for the production of the Roewe under its own brand. SAIC didn't pay anything for the project until it sent Ssangyong 60 billion won late last year, a paltry sum compared with the total bill of 300 billion won needed for the development of a new model.
SAIC is scheduled to launch a follow-up model of the Kyron, with a project name of C-200, in September.
``It's because SAIC has already snatched all the technology needed for the new model,'' Ssangyong's labor union said.
SAIC is the second largest Chinese automaker after First Automobile Works. It is also the first Chinese manufacturer to partner with a foreign investor, forming Shanghai Volkswagen Automotive with Germany's Volkswagen Group in 1989.
It has recently been making aggressive expansion moves through purchases and acquisitions at home and abroad, including Ssangyong. SAIC, which has the rights to a number of models from British brand Rover, took over local rival Nanjing Automobile Company in 2007 and is also in talks with Ford to purchase Volvo for $6 billion.