Ssangyong Motor Restarts Production Line... "Will Do Our Best to Resolve Undelivered Inventory"

In front of the main building of Ssangyong Motor's Pyeongtaek plant, support placards from parts suppliers are displayed.

[Photo by Ssangyong Motor]

[Asia Economy Reporter Ki-min Lee] Ssangyong Motor, which experienced production disruptions throughout last month, announced on the 2nd that it will restart the production line at its Pyeongtaek plant.

Earlier, Ssangyong Motor filed for rehabilitation proceedings and the Autonomous Restructuring Support (ARS) program with the court on December 21 of last year. When Ssangyong Motor failed to settle promissory notes that matured at the end of January, some large corporations and foreign parts suppliers refused to deliver parts, causing the Pyeongtaek plant to halt operations. In February, Ssangyong Motor operated its factory for only three business days: the 1st, 2nd, and 16th.

However, as Ssangyong Motor and the Ssangyong Motor Suppliers Emergency Countermeasure Committee continuously contacted and persuaded the suppliers who had refused delivery, they agreed to resume deliveries, enabling normal production from that day forward. In particular, parts suppliers also hung banners supporting Ssangyong Motor’s swift normalization at each entrance of the Pyeongtaek plant.

A Ssangyong Motor official stated, "As a result of continuous communication and consultation with the relevant parts suppliers, we have decided to restart the production lines at the Pyeongtaek and Changwon plants from the 2nd. Despite the difficult situation, we plan to do our utmost to resolve the backlog of undelivered vehicles by actively cooperating with parts suppliers who trust and support Ssangyong Motor and by promptly resuming production line operations."

Meanwhile, although Ssangyong Motor’s ARS program expired on the 28th of last month, the court decided to postpone the commencement of court receivership. This is intended to allow more time as Ssangyong Motor is negotiating with investors.

Ssangyong Motor is currently negotiating investment with the U.S. automobile distributor HAAH Automotive. Once negotiations with HAAH are completed, Ssangyong Motor will immediately apply for a P-Plan (Preliminary Rehabilitation Plan) and proceed to obtain the consent of creditors.