SAIC Motor Corp., China’s largest automaker, may exit from Ssangyong Motor Co. if the South Korean company’s labor union doesn’t accept a restructuring plan, a lawmaker said after meeting Ssangyong’s head.
SAIC may pull out by early or mid-January, Jung Jang Seon, chairman of the Knowledge Economy Committee of South Korea’s National Assembly, said in a statement. Jung today met with Ssangyong Chief Executive Officer Choi Hyung Tak, he added, without giving details of the proposals before the labor union.
The Chinese automaker’s withdrawal will mean bankruptcy for Ssangyong, Choi said, according to the statement. Yonhap News yesterday said the company may not be able to pay December salaries on time due to a lack of funds for operations.
Cha Ki Woong, a Ssangyong spokesman, and Zhu Xiangjun, a SAIC spokeswoman, both declined to comment. SAIC owns 51 percent of Ssangyong. Yonhap News reported the possible pull out earlier today.
Shanghai Automotive Industries Corp., SAIC’s parent, bought 49 percent of Ssangyong for about $500 million in 2004 following the collapse of Daewoo Group. The stake was later increased and injected into Shanghai-listed SAIC.
Ssangyong fell 14 percent to 1,105 won in Seoul trading, extending the drop for the year to 84 percent.
The automaker temporarily suspended production from Dec. 17 to reduce inventory as the worst financial crisis since the Great Depression weakens consumer spending. Ssangyong’s sales plunged 27 percent in the first 11 months.
