Ssangyong - SAIC management replaced by riot police!

The Korean Unions consistently prevented SAIC from making changes to turn around Ssangyong. Now with SAIC mangement replaced by Korean Government management, the only thing that has changed is that the management has more power than it used to have!


Ssangyong Motor threatens to use riot police to end strike

SEOUL (AFP) — Struggling South Korean car firm Ssangyong Motor said Wednesday it would call in riot police to end the occupation of its plant by striking workers unless they disperse by early next week.

Thousands of workers armed with metal pipes and firebombs have been occupying the carmaker's plant at Pyeongtaek city, 70 km (44 miles) south of Seoul, since May 21 to protest a massive job-cut plan.

"Unless striking workers disperse voluntarily by Monday, we will take all possible legal action," Lee Yoo-Il, one of the two court-appointed managers supervising the automaker's bankruptcy process, told journalists.

"This means we will call in riot police," he said.

Because of the occupation over the past two weeks, the already insolvent automaker was unable to produce 3,793 vehicles worth 82 billion won (66 million dollars), the company said.

Ssangyong, which has been under court receivership since February, plans to cut 36 percent of its workforce, or 2,646 workers, as part of restructuring.

But if the strike continues the bankruptcy court will not approve the restructuring plan and this would force the company into liquidation, Lee said.

Workers occupying the factory are demanding managers minimise job losses through work-sharing.

The debt-stricken company in February won court protection from creditors. The court told its Chinese majority owner, Shanghai Automotive Industry Corp, to give up management control.

Court-appointed managers have since struggled to turn the company around through job cuts and cost savings.

The country's smallest carmaker, Ssangyong specialises in sports-utility vehicles and luxury sedans.

Source: http://www.google.com/hostednews/afp/article/ALeqM5iCDF2vOY09lD8JoeN3T35kxqrZ_A

A Korean view of the situation:


Government and creditors should take responsibility for Ssangyong Motors

The situation at Ssangyong Motor Company (SYMC) is driving towards disaster. On Monday, SYMC fired 976 employees, and at present amid a factory sit-down strike and a sealed off workplace it appears impossible to find potential for mediation between labor and management. If this keeps up and if police are brought in, there is a possibility that things could turn into a large-scale catastrophe.

How SYMC arrived at this juncture is clear. In a word: mismanagement. One characteristic of automakers is that their financial situation lives and dies by the competitiveness of their products, and the fact is that whatever the cause, SYMC has been incapable of coming up an inexpensive, high-quality product capable of satisfying consumer demands. The recent global financial crisis simply hastened its inevitable collapse.


When a company’s mismanagement leaves it faced with bankruptcy, there are not many choices available. In the case of SYMC, which was granted bankruptcy protection and is following a court-approved restructuring scheme for the company’s recovery, there is little that can be done to avoid large-scale measures. A protracted strike would only lower the chances of recovery. Large-scale cost-cutting was expected, and is to be effected through measures including a reasonable number of job cuts in order to get the company into a state of survival, after which new capital is to be invested in order to keep it going. The labor union’s side has presented alternative plans for cutting costs including voluntary resignations, early retirement, and a new job sharing program moving to a 5 hour shift system, but the reality is that they are simply not enough to alter the larger issues.


However, whether SYMC workers should simply accept the large-scale firing is a matter that requires further examination. Unlike other insolvent companies in the past, the unique situation at SYMC intensifies the question of whether the responsibility for mismanagement on the workers.



In October 2004, SYMC was sold to China’s Shanghai Automotive Industry Corporation (SAIC) for 590 billion Won. At the time, the government and creditors likely felt that the lack of domestic companies interested in buying it left them with no choice but to sell it to a foreign company, but this ultimately functioned as an important factor in bringing about the current mismanagement problem. After SAIC absorbed SYMC, it did not deliver on the new investment it promised, and when it failed to develop competitive new models, the market shunned the automaker. SAIC has drawn criticism for absconding with SYMC’s high-level technology, or what people are calling its “eat and run” tactics.


It is hard for the government and the creditors to avoid the criticism that they neglected to prepare the mechanisms necessary to minimize such side effects of attracting foreign capital. For this reason, SYMC cannot be handled in the same manner as other insolvent companies.


The search for a solution must start here. Since SAIC, the majority shareholder, has abandoned its management rights and stepped back, it is realistically impossible to demand any accountability from them. In the end, there is no other way but for the South Korean government and creditors to acknowledge the “original sin” in SYMC’s mismanagement and actively step up to solve the problem. Thus, they must examine in depth whether there is not some third solution outside of existing plans for the company’s recovery.


To begin, the Ministry of Labor or the Ministry of Knowledge Economy must engage in direct dialogue with labor and management since little resulted from the talks between the mayor of Pyeongtaek and labor and management representatives. Otherwise, there is a strong possibility that things will simply be dragged out until the police are ultimately brought into handle the situation. If this happens, the only outcome that will result is a crisis at SYMC that will deliver a fatal blow not only to the striking workers but also to the government. There needs to be serious consideration of how this kind of social cost can be minimized.


When viewed formally, the fate of SYMC, which now sits under court receivership, is totally dependent on the decision of the courts. However, given the special circumstances of SYMC’s case and the future of the South Korean automobile industry, it is the height of irresponsibility for the government and creditors to leave everything up to the courts and sit back to watch the show. They should take a good, long look at the flexibility of the U.S. government in accepting the temporary nationalization of General Motors, something inconceivable in the past.


Not much time is left. Whether SYMC goes the way of sharing benefits or sharing disaster depends not on the union, but on the government and the creditors.



Source: http://english.hani.co.kr/arti/english_edition/e_opinion/359397.html

And things start to get serious:

After negotiations with the company management ruptured Monday, workers of Ssangyong Motor Co. started a sit-in strike at the Pyeongtaek plant in Gyeonggi Province. The union has expressed its willingness to use violence until the company's dismissal measure is entirely withdrawn.

The Korean Confederation of Trade Unions said it will hold full-fledged protests against the government's labor policies with the participation of its 650,000 members and other civic groups nationwide.

"We will no longer ask for negotiations with a government that doesn't listen to the voice of the public," said Lee Seung-chul, spokesperson for the umbrella group, at a news conference yesterday.

Source: http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2009/06/10/200906100058.asp

It's starting to look rather bad for Ssangong as over 5000 Korean Police prepare for a full scale battle to take the paint plant currently held by the unions.

The Gov't Cannot Afford Support for Ssangyong


The standoff at Ssangyong Motor is taking on tragic proportions. The automaker's plant in Pyeongtaek south of Seoul has become a heavily armed fortress equipped with three home-made cannon that can fire 30 metal bolts at once and workers brandishing 300 sling shots of varying sizes, some 400 Molotov cocktails and around 1,000 steel pipes. Police have armed themselves even with high-voltage stun guns. More than 110 people have been hurt during minor confrontations so far and a full-scale clash could lead to fatalities.

The prolonged standoff that began on May 22 has led to pitched emotions, and Ssangyong Motor's shareholders, management, 7,000 staff and their families are not the only ones suffering. Ssangyong's subcontractors and traders in the city whose businesses catered to the automaker's employees are also seeing major losses. Even before a court rules on the fate of the ailing SUV maker in September, most experts have concluded it cannot survive in the present conditions and even if it does, it would be unable to generate profits.

The public is heartbroken not only to see a company suffering on its deathbed, but to witness the desperation felt by the workers there who have chosen to hold their ground rather than be pushed out onto the streets to face an uncertain future. If the situation worsens, the leaders of the union will ultimately be held accountable for choosing such radical tactics and for pulling into the fray hundreds of unionized workers who were willing to accept restructuring measures offered by the management.

The Gyeonggi Provincial Government and politicians intervened and tried to get the unionized workers to resume talks with management, but all efforts failed. Even if one side concedes and an agreement is reached, there is no guarantee at this point that the agreement can be implemented, and the automaker's future remains bleak.

The union is demanding that the main creditor, state-run Korea Development Bank, and the central government intervene and provide unlimited support so that Ssangyong's assembly lines can run again. But the moment KDB or the government steps in, demands from the union and management will only increase. And the government is extremely hesitant about using taxpayer's money to save a sinking company, which not only immediately needs hundreds of billions of won for emergency funds but also can become too costly to keep on life support. That is why the government will have to keep support funding to a minimum, despite Ssangyong's desperate situation.

The government will have to look at the big picture of Korea's automotive industry after Ssangyong and possibly find a way to use the automaker's Pyeongtaek plant within the framework of that big picture.

Source: http://english.chosun.com/site/data/html_dir/2009/07/28/2009072800743.html

The standoff at Ssangyong Motor is taking on tragic proportions. The automaker's plant in Pyeongtaek south of Seoul has become a heavily armed fortress equipped with three home-made cannon that can fire 30 metal bolts at once and workers brandishing 300 sling shots of varying sizes, some 400 Molotov cocktails and around 1,000 steel pipes. Police have armed themselves even with high-voltage stun guns. More than 110 people have been hurt during minor confrontations so far and a full-scale clash could lead to fatalities.

Oh dear! if this were a military situation, I couldn't see any way out that didn't involve destroying the plant.

It sounds far worse than Grunwick or The Times under Murdoch.

Unless the police could persuade some insiders to let them in to avoid more injuries...


...or could the workers somehow get a free pass to North Korea?

patpending wrote:
Oh dear! if this were a military situation, I couldn't see any way out that didn't involve destroying the plant.

It sounds far worse than Grunwick or The Times under Murdoch.

Unless the police could persuade some insiders to let them in to avoid more injuries...


...or could the workers somehow get a free pass to North Korea?

The worst part is that the majority of the workers want to work and save the company but are prevented from doing so by the ones that have already lost their jobs - they are not actually on strike as they are not employed!

Windy wrote:The worst part is that the majority of the workers want to work and save the company but are prevented from doing so by the ones that have already lost their jobs - they are not actually on strike as they are not employed!

Oh dear. I do hope the solution can be resolved more peacefully than by what looks like an inevitable escalation of violence.

Or is Korea like France, where after a week of extreme action the Government generally caves in?

Who would have thought that the carmaking company that owns Longbridge would ever find the industrial relations there far, far better than those in another factory?

patpending wrote:

Windy wrote:The worst part is that the majority of the workers want to work and save the company but are prevented from doing so by the ones that have already lost their jobs - they are not actually on strike as they are not employed!

Oh dear. I do hope the solution can be resolved more peacefully than by what looks like an inevitable escalation of violence.

Or is Korea like France, where after a week of extreme action the Government generally caves in?

Who would have thought that the carmaking company that owns Longbridge would ever find the industrial relations there far, far better than those in another factory?

Looks like the end is very close, either for the union or the company:

Since the rupture of negotiations between Ssangyong Motors labor and management, the sense of tension inside the paint shop that has served as the site of the strike is on the rise. An impending police raid is expected and some of the workers are preparing to leave the site, however, an estimated 600 workers are pledging stay regardless of the consequences. The company also ordered its 4,500 employees to be on standby to work on Tuesday.

The company announced that since early Sunday morning, the 42nd day of the strike and the day talks fell apart, a total of 92 unionists have left the site. The company also turned off electricity to the paint shop on Sunday, after having already suspended food delivery on July 17, and water and gas supplies on July 20. The paint shop, with its food, water, gas and now electricity suspended is standing in front of a certain storm. Those who left the company and those that remain, their families, creditors and police, are looking at the place with unease.


Han Sang-gyun, the Ssangyong Motors chapter head of the Korean Metal Workers Union met with unionists at several locations throughout the plant Monday. He said the real intention of the company was to kill the union. At 11:00 a.m. orange bags filled with tearing agents once again began falling from helicopters onto the paint shop from above. Someone called out, “Are we to be treated as weeds that require pesticide?” Ever since the electricity was shut off, the unionists have used butane gas to cook rice to eat rice balls. The air conditioning has been shut off too, so the inside of the paint shop is sweltering with a few lit candles placed here and there. The entire site is full of flammable materials like paint thinner and the safety of the workers appears unstable.


Clashes with the company have recommenced. Unionists fired projectiles using slingshots as company security officers attempted to remove a metal barricade set up by the unionists near the paint shop.



The families of these “surviving workers” are overcome with concern. A member of the group, “Wives Who Love Ssangyong Motors,” expressed her frustration and said, “It seems the union’s unreasonableness and the company’s announcement of a breakdown in talks have led us to this, and the order from the company for employees to prepare to enter the factory has made us uneasy. Meanwhile, this asshole’s administration is just standing by as so many people are struggling...”

Source: http://english.hani.co.kr/arti/english_edition/e_national/369377.html

Also: Robocops on the BBC: http://news.bbc.co.uk/1/hi/world/asia-pacific/8183246.stm

Well it doesn't look like the Unions intend to give up:

By late afternoon, the situation was in a lull and the strikers had ceased firing at police, the police official said. Police had earlier closed in on the paint shop but did not enter it. Union spokesman Lee Chang-kun said a police assault on the paint shop would be deadly. “We will respond to it, bracing ourselves for death.”

http://thejakartaglobe.com/business/south-korean-commandos-launch-raid-on-car-factory-held-by-strikers/322070

Most SKorean strikers end violent factory sit-in

PYEONGTAEK, South Korea — A 77-day sit-in by workers battling redundancy, which shut down a South Korean auto plant and sparked violent clashes with police, appeared to be ending Thursday.

Ssangyong Motor said unionists were leaving the paint shop where they had holed up although some hardline members were still inside. Yonhap news agency said workers and management had reached a deal to end the occupation.

Almost 100 people have been injured this week at the plant in Pyeongtaek, 70 km (43 miles) south of Seoul. Strikers have battled riot police with giant catapults, firebombs and steel pipes while police fought back with tear gas.

In dramatic scenes Wednesday, police commandos rappelled from helicopters onto the roof of the paint shop, the last building still held by the strikers.

Other officers inside three containers lifted by giant cranes landed on a nearby roof Wednesday while two helicopters dropped liquefied tear gas on protesters.

Ssangyong spokesman Cha Ki-Ung could not confirm the deal but said there would be an announcement soon about talks which began earlier Thursday.

Cha told AFP that unionists were leaving the paint shop.

"Some hardline members are still inside. Other members gave up and are waiting in a building attached to the paint shop for ID checks by police," the spokesman said.

Yonhap said 30 members who rejected the deal are still inside. It said police plan to arrest 21 alleged ringleaders.

The Chinese-invested Ssangyong, the country's smallest automaker, received court protection from bankruptcy in exchange for a turnaround plan which called for 36 percent of its workforce, or 2,646 employees, to be sacked.

Some 1,670 accepted voluntary retirement but the rest went on strike and occupied several buildings, eventually halting production.

More than half gave up after managers cut off power and water and thousands of riot police tightened their siege.

An estimated 500 were still holed up in the paint shop earlier Thursday, with police fearful of storming the building because it is packed with inflammable materials.

Union leader Han Sang-Kyun and court-appointed manager Park Young-Tae began meeting earlier in the day in a container outside the paint shop.

"I understand that both sides reached a deal to save 48 percent of the fired workers," Yonhap quoted a source as saying.

The union had proposed a plan to save 48 percent of the workers by giving them unpaid long-term leave of absence, according to the source. Ssangyong had previously offered to save 40 percent.

The standoff has clouded prospects for the carmaker's survival, costing nearly 316 billion won (258.3 million dollars) in lost production.

China's Shanghai Automotive Industry Corp has a 51 percent stake in Ssangyong but lost management control when it received bankruptcy protection.

The firm specialises in sport utility vehicles and luxury sedans.

Surveys show South Korea's reputation for union militancy has been a factor discouraging foreign investment. But despite the scary scenes at Ssangyong, analysts say employees are generally becoming more pragmatic.

Several unions have recently quit the militant umbrella group the Korean Confederation of Trade Unions, which was involved in the Ssangyong dispute.

http://www.google.com/hostednews/afp/article/ALeqM5gaYe8rPANfbMXzPnHKPA_E3BLVjw

I thought we had bad industrial relations at our car factories in the 1970s, but this is in an entirely different league

ZTsteve wrote:I thought we had bad industrial relations at our car factories in the 1970s, but this is in an entirely different league

But maybe with the disruption going on at a french component manufacturing plant they might be heading the same way - the factory is now closed due to violence against managers!

there's a video here. Far less violence than I had feared!

It's all over, the Unions have accepted a deal where the workers, instead of loosing their jobs just go on unpaid leave. (no unemployment benefits then )

Despite no buyer, Ssangyong’s stock price soars


Ssangyong Motor Co. soared on the Seoul stock market yesterday, after the automaker under bankruptcy protection said it would resume operations today.

Still, the future of the nation’s smallest automaker is clouded, as the government repeatedly says that it will not offer any financial support unless the company finds a potential buyer.

The share price of Ssangyong Motor rose by the daily limit of 15 percent yesterday to close at 3,515 won ($2.81), while the benchmark Kospi declined 0.9 percent. It was the fifth straight trade session of sharp gain.



Ssangyong Motor executives said yesterday the automaker had restored the manufacturing facilities at its Pyeongtaek plant in Gyeonggi after the compound had been damaged during a 77-day occupation by unionized workers protesting at the company’s massive layoffs. The union reached a compromise with management and ended the occupation on Aug. 6 when police stormed the plant.

“Damage wasn’t as serious as we expected, so the necessary work to get operations under way have taken one week, shorter than the expected two or three weeks,” said Choe Sang-jin, vice president of Ssangyong Motor.

During the occupation, the automaker’s sales plunged 99 percent over June to 71 vehicles last month. Ssangyong Motor said it expects to produce 2,600 units this month, and to produce about 4,000 units per month from September. The Pyeongtaek plant, which is Ssangyong Motor’s only plant that produces completed cars, has the capacity of 230,000 cars a year.

Still, the occupation cost Ssangyong Motor about 316 billion won in lost production, making it more difficult for the cash-strapped automaker to meet a Sept. 15 court deadline to submit a recovery plan.

Lee Youn-ho, minister of knowledge economy, told the media this week that the probability that Ssangyong Motor will survive on its own is not very high. “The government will prepare various ways to support suppliers for Ssangyong. But for Ssangyong itself, we need to see the court’s judgment and if anyone has an interest in acquiring the company,” Lee told the Bloomberg on Tuesday.

Meanwhile, Ssangyong Motor’s main creditor, the state-run Korea Development Bank, said yesterday it would provide 130 billion won in new loans to the automaker so it can pay wages and severance pay for laid-off workers.

Source: http://joongangdaily.joins.com/article/view.asp?aid=2908706

Ssangyong Motor Co. soared on the Seoul stock market yesterday

how much of the company is quoted?