Ssangyong may face liquidation without aid!

The pretty decent-looking Ssangyong C200 Concept may not see the light of day if things go the way they are

The first manufacturer to hit the dust in this depressing economy could be Chinese-owned South Korean manufacturer Ssangyong. There is a whole list of problems right now happening with the company, which makes trucks and SUVs based on Mercedes-Benz technology, such as the Ssangyong Actyon SUT.

First of all, a huge amount of debt is goin to mature early this year, and Ssangyong needs a cash injection from its Chinese parent SAIC to be able to settle these debts. Things aren’t going that well for Ssangyong financially, as it recently posted its 4th consecutive quarterly loss of US$21 million.

But before SAIC injects any cash into Ssangyong, it wants to make sure the cash will be well-spelt. Ssangyong must restructe its worker union and lower labour costs, which as usual is rejecting any changes, just like their overpaid counterparts in Detroit. Understandable of course, who would want to be paid less in this already tough times, but it’s better to have a job that pays less than no job at all?

The workers union are also asking for the Chinese executives in Ssangyong to resign, obviously oblivious to the fact that a Chinese company owns them. SAIC is obviously not very happy about all of this at all, and there is talk that it may just pull out of Ssangyong and let it sink. Ssangyong has also tried to get aid from the South Korean government, but all it got was a response from the Ministery of Knowledge Economy that the government “is not planning direct financial support” for Ssangyong.

Rather than go into bankruptcy for debt restructuring, an unnamed official from the Korea Development Bank says that it would liquidate the company instead, but no firm decision has been made on this matter.

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