Updated Jan.22,2009 09:25 KST

Ssangyong Bailout Hinges on Better Productivity

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The government has told Ssangyong Motor to improve its productivity before it can agree to a bailout, but the ailing automaker's union rejects any personnel cutbacks.

In a lecture hosted by the Korea Chamber of Commerce and Industry in Seoul on Wednesday, Knowledge Economy Minister Lee Youn-ho said, "Ssangyong Motor should increase productivity to a proper level to receive support from the government and creditors." The court-appointed receiver should include this in their plan to resuscitate the automaker, Lee added.

Ssangyong's personnel costs are reportedly 20 percent of car prices, twice the industry average of 10 percent. But Lee Chang-keun, the planning chief for Ssangyong's union, said, "There are several ways to resuscitate Ssangyong, but we cannot agree to cut manpower."

Another union leader claimed Ssangyong's low productivity is the result of China's SAIC having "neglected" Ssangyong over the past four years. "Our company can increase productivity to the level of other automakers' if it invests in automation."

(englishnews@chosun.com )