By Kim Hyun-cheol
Staff Reporter
Ssangyong Motors will shed over 2,600 workers, or 35 percent of its entire workforce, as part of a self-rescue program.
The smallest of Korea's five automakers is now under court receivership and it remains to be seen whether or not the plan will please creditors, who may ask for bigger cuts.
It is the first self-rescue plan by the Korean carmaker since the global crisis last year. GM Daewoo and Technology, the Korean unit of the American carmaker, is also in trouble, seeking additional credit lines from the Korean government. Renault Samsung is not in good health.
A total of 2,464 production workers and office staff will get pink slips, it said, and additional measures such as early retirement and work transfer will be discussed with its union members.
Under the plan, about 35 percent of its executives will leave the firm and the remainder will have their wages cut by up to 54 percent, it added. In addition, some of the maker's facilities currently not in operation are to be put up for sale.
The plan was unveiled at the recommendation of Samjong KPMG, an accounting firm that reviewed Ssangyong's financial records. It concluded downsizing should be the No.1 priority before mapping out a long-term recovery plan.
Over the next five years, it will produce five new models ― two sedans and three sports utility vehicles (SUVs), Ssangyong said.
"This plan will contribute to enhancing Ssangyong's chance of survival," Lee Yoo-il, its court-appointed president, said in a statement.
Ssangyong seeks to turn profitable from the second half of next year.
Last year, Ssangyong posted 2.5 trillion won in sales, down 20 percent from the previous year, and an operating loss of 227.4 billion won, with the net figure topping 709.7 billion won over four straight quarters of losses as the global slump reduced demand for its key SUV models.
Its union said it will not accept the downsizing plan. It also unveiled an alternative self-rescue program featuring job sharing and the shortening of working hours. It also called on China's Shanghai Automotive Industry Corporation to give up its majority-shareholder rights.
The former Ssangyong owner relinquished Ssangyong's management control after the court receivership started, but still retains its 51-percent stake.
"It's more like a crippling plan than a rescue one," union spokesman Lee Chang-kun said of the program. "The union can't agree to the plan. Normalization by layoffs is not our consideration at all."