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White-collar staff at Ssangyong Motor headquarters and union members at plants were shocked Wednesday as the company announced a plan to lay off 2,646 people or 36 percent of employees. The layoff will affect 45 percent of assembly-line workers, 21 percent of white-collar staff, and 5 percent of research staff.
Almost half of the workers at the finished car assembly plant in Pyeongtaek, Gyeonggi Province and at the engine plant in Changwon, South Gyeongsang Province will go.
The union immediately opposed the plan, but experts agree that a strike would kill the SUV maker's last hope of survival. Ssangyong's annual production capacity is about 200,000 vehicles, but it actually produced only 81,447 cars last year. Until March this year, it made a mere 6,358 cars, down 75.3 percent on-year. Under these circumstances, the more cars it makes, the more debt it runs up.
Planning division director Choi Sang-jin said this doesn't mean that the company will immediately lay off employees, but it will consult the union over a restructuring plan starting next Monday. He said this was "an inevitable choice to turn Ssangyong Motor into a viable company worth taking over."
Even if the restructuring plan is successful, it will be meaningless unless sales pick up. The key will be to find a suitable investor to inject funds, and for that to happen, the firm has to be kept out of liquidation. Ssangyong will have to convince the court and its creditors that its survival value is greater than its liquidation value. If a valuation that will be finished on May 6 concludes that its survival value is greater, the receivers will work out a revival plan. If not, it will go into liquidation.
(englishnews@chosun.com )
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