Ssangyong Motors Gets $45 Mil. from Chinese Parent SAIC
outh Korea's Ssangyong Motor Co. said Monday that it had received $45 million from its Chinese parent Shanghai Automotive Industry Corp., as the ailing automaker struggles to stave off a possible liquidity problem.
The company is also facing the threat of a strike from unionized workers, who began voting Monday whether to walk off the job if management demands massive job cuts as part of a restructuring.
News reports have said the carmaker — in which SAIC has a controlling 51-percent stake — plans to slash more than 3,000 jobs, including half of some 5,200 assembly line workers.
Though the company denies those reports, the union says it is apparent that such plans are in the works.
Amid the labor troubles, Ssangyong announced in a statement that SAIC completed payment of $45 million in late December to help the automaker develop new products and improve its cash flow.
"This showed SAIC's resolve to (help) Ssangyong's survival," the statement said.
Ssangyong said it will hold a board meeting on Thursday to address the company's financial problems.
Ssangyong, South Korea's fifth-largest automaker, is far smaller than domestic industry leaders Hyundai Motor Co. and Kia Motors Corp. but with the global auto industry in a perilous state, its fate is being closely watched.
The company, which has annual production capacity of 200,000 vehicles and 7,100 employees, posted a net loss of 98.1 billion won ($74.1 million) in the first nine months of last year amid weakening domestic demand for SUVs — Ssangyong's mainstay vehicles. The company also produces the Chairman luxury sedan.
SAIC sought the South Korean government's help to ensure Ssangyong's main creditor, Korea Development Bank, offers new loans to Ssangyong. But a senior official at Korea Development Bank said last week it won't provide financial assistance to Ssangyong Motor unless SAIC does so first.
outh Korea's Ssangyong Motor Co. said Monday that it had received $45 million from its Chinese parent Shanghai Automotive Industry Corp., as the ailing automaker struggles to stave off a possible liquidity problem.
