Ssangyong Motor Co., the South Korean automaker under bankruptcy protection, said it will resume operations as early as this month after protesting workers ended a 77-day occupation of its factory in Pyeongtaek.
Car-making equipment inside the plant, located 70 kilometers (44 miles) south of Seoul, sustained no major damage and normal operations can be expected after two to three weeks, Ssangyong said today in an e-mailed statement.
The protest, which cost the automaker about 316 billion won ($258 million) in lost production, ended yesterday after police stormed one of the plant's paint shops by helicopter on Aug. 5 and sprayed tear gas. Workers took over the factory in late May demanding Ssangyong reverse a plan to fire 36 percent of the workforce as part of an effort to exit bankruptcy and remain a viable company.
"The chances of Ssangyong's survival are very slim at the moment because it doesn't have the money to develop new models and expand its sales network," said Song Sang Hoon, an analyst at Kyobo Securities Co. in Seoul.
The protest has caused production losses of about 14,590 vehicles as of Aug. 5, according to the automaker. Ssangyong only sold 71 sport-utility vehicles and sedans last month.
A group of the carmakers' suppliers submitted a request to the bankruptcy court on Aug. 5 to seek a liquidation of the company to recoup debts. The request is pending a review by the court.
Workers have agreed to a salary freeze and reductions in bonuses and benefits and the company plans to begin loan talks with Korea Development bank, Ssangyong said in the statement.
Ssangyong climbed by the daily 15 percent limit to 2,320 won as of 1 p.m. in Seoul. The stock has more than doubled this year, outperforming a 39 percent rise in South Korea's benchmark Kospi index.
SAIC Motor Corp., China's biggest domestic automaker, lost management control when Ssangyong entered receivership in February. A bankruptcy court gave the South Korean company until Sept. 15 to submit a turnaround plan.
