Ssangyong Motor Union Holds Delegates Meeting to Discuss Partial Delay in Wage Payment

Liquidity Crisis Intensifies Due to Cash Payments to Parts Suppliers

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] The Ssangyong Motor labor union discussed a plan to delay wage payments. This is interpreted as a measure arising amid a liquidity crisis due to parts being supplied in cash payment form.

According to industry sources on the 21st, the Ssangyong Motor company union held a delegates' meeting that day and discussed a plan to delay payment of members' wages by about 30-50%.

An industry insider said, "It has not been decided how much wages will be reduced," adding, "Some portion of wages for this month and next month may be delayed."

As Ssangyong Motor's liquidity crisis worsened recently, discussions on wage cuts began. After Ssangyong Motor filed for court receivership at the end of last year, some partner companies refused to supply parts. Consequently, Ssangyong Motor also suspended operations at the Pyeongtaek plant on the 24th and 28th of last month.

Major domestic parts companies such as Hyundai Mobis resumed parts supply, but foreign parts companies like BorgWarner Ochang (T/C assembly) and Continental Automotive (combimeter) refused to deliver until the end.

However, Ssangyong Motor has not been able to extend official supply contracts and is receiving parts by paying cash on a daily basis. An industry source explained, "Due to Ssangyong Motor's liquidity situation, it is tight to pay parts suppliers, so it seems they are trying to seek understanding from employees."

Regarding this, specific details are known to be discussed at a union delegates' meeting on the 22nd attended by the company union chairman. Also, as the Ssangyong Motor sale negotiations are just one day away, the company union is likely to discuss the demands of Industrial Bank of Korea Chairman Lee Dong-geol at this meeting. On the 12th, Chairman Lee proposed conditions for supporting Ssangyong Motor to the union, including "maintaining wages and collective agreements for 3 years" and "no labor disputes until turning a profit."

On the other hand, the minority union, the Korean Confederation of Trade Unions Ssangyong Motor branch, is opposing this. That morning, the Ssangyong Motor branch held a protest rally in front of the Industrial Bank of Korea in Yeouido-dong, Seoul, and delivered a letter of protest. They argued that Ssangyong Motor's no-labor-dispute record has continued for 11 years since 2009, and under labor law, collective agreements cannot exceed 2 years, so Chairman Lee's demands are unreasonable.