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Dealerships forced to sell showroom models, lose sales of 140 billion won
June 22, 2009
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With production of vehicles at Ssangyong Motor’s plants at zero this month, the company’s sales have plummeted. As of last week some 90 Ssangyong vehicles were sold. Due to insufficient inventory even models on display in showrooms had to be put up for sale. The company expects it will be difficult to even sell 100 units this month, even if production lines restart. As of Friday, the strike, which started in April among some employees and gradually grew, the company’s manufacturing losses at its plants totaled 6,385 units. Sssangyong estimated sales losses during this period at roughly 140 billion won ($109.9 million). In the first quarter alone, the deficit stood at 270 billion won, and the company expects the figure to expand in the second quarter. “We’re seriously losing customers as productions are fully stopped,” said a Ssangyong official who asked to remain anonymous. “There have even been cancellations on overseas orders.” Even as the situation shows signs of worsening, management and labor still continue to find it difficult to narrow their differences. Some 4,000 Ssangyong employees tried to enter the plant in Pyeongtaek last week, only to be blocked at the entrance by the labor union. Park Young-tae, Ssangyong’s court-appointed court receivership manager, met with the labor union on Thursday and Friday, but failed to reach an agreement. The management said although the company offered to back off on several issues including layoffs, the union adamantly refused, emphasizing that it would not make concessions until layoff plans are scrapped and irregular workers’ job security is guaranteed. The union also held a press conference Friday immediately after the meeting with Park and insisted on government intervention. The union said that another option would be to turn the automaker into a public company with Korea Development Bank becoming its major shareholder. They also demanded that a public bailout fund be injected into the company. “There is a misunderstanding with labor,” said another Ssangyong Motor official who asked not to be named. “This is not an issue of management and labor, but a promise with our creditor,” the official added. “If we could, we would try to keep everyone at the company. But if we don’t follow the plan that the court and creditors approved, all will be lost.” Meanwhile, concerns are growing that as the situation worsens, Ssangyong Motor could finally go bankrupt. By Lee Seung-nyeong, Lee Ho-jeong [ojlee82@joongang.co.kr] |
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