Chinese Press Stress SAIC Pain in Ssanyong Bankruptcy
Ssangyong Motors' application for court receivership has prompted the Chinese media to highlight efforts by Shanghai Automotive Industry Corporation to save the Korean automaker, contradicting claims by the firm that SAIC was happy to let it go under after extracting key technologies through the takeover. Reuters, meanwhile, said SAIC may be looking to dump Ssangyong in favor of buying a more profitable brand.
Beijing News on Saturday said SAIC, Ssangyong's largest shareholder, is expected to sustain a big loss in the process.
The view stands in stark contrast to claims in the Korean press that SAIC took over Ssangyong at a knock-down price and abandoned it after securing key technology. SAIC took over Ssangyong for US$500 million in 2005 and is the largest shareholder with a 51.3 percent stake.
Beijing News said SAIC had asked for the layoff of 2,000 staff in return for an offer of US$200 million to help relieve Ssangyong of "enormous personnel costs." It said that the Ssangyong incident was "a kind of tuition fee" for Chinese businesses in the process of advancing into overseas markets.
China's CCTV on Sunday quoted Jia Ke, an auto industry analyst, as saying, "I think the court receivership is a step to save the firm. What measures should SAIC take? I think a capital injection, only, has little meaning. Fundamental reform is needed to save the firm out of trouble."
In a story last Friday, Reuters reported, "SAIC may be looking to dump Ssangyong in favor of purchasing a better brand. With the Big Three in Detroit hit so badly, brands like Saturn, Saab, and Volvo are now on the market. SAIC's interest in these companies has been rumored in regional press there."
email@example.com / Jan. 12, 2009 07:54 KST