Ssangyong union agrees on restructuring plan – ET Auto

SsangYong is expected to invite tenders by next month at the consent of the union.

New Delhi: The workers at cash strapped Ssangyong Motor has agreed to accept the restructuring measures even as it struggles under court receivership. The Korean carmaker, SsangYong Motors looks to complete the sale process by finding a new majority investor by this October.

It is understood that out of 3,224 unionized workers, 1,681 which works out to 52 % accepted the company’s proposal to furlough employees. The remaining staff will see a reduction in wages.

The Ssangyong labour union has also agreed to take a two-year unpaid leave with all company benefits suspended until June 2023.

While Ssangyong will continue to sell off assets for more liquidity, the management has also decided to implement an additional 20% wage cut.

SsangYong is expected to invite tenders by next month at the consent of the union. The court-appointed auditor Ernst & Young Hanyoung, is to oversee the sale process, according to sources.

With the increased push for electric vehicles globally, SsangYong is likely to see more EV bidders too in the fray. While US Based Haah Automotive continues to be in the game, others including electric bus maker Edison Motors and a consortium of EV makers along with a PE fund are also showing interest in picking up a stake.

The value of the stake is likely to be fixed at around 250 million dollars, offered earlier by Haah Automotive. A Mahindra spokeswoman maintained, “It is a court run process and we cannot comment on it”.

SsangYong has over the last few weeks cut a few senior executive jobs as it continues with its ongoing cost-cutting drive. This has led the worker unions to stage protests from its production base in Pyeongtaek asking for clarity from its main shareholder Korean Development Bank. The Seoul Bankruptcy Court on April 15 approved the debt-rescheduling process for SsangYong Motor as the US-based HAAH Automotive, the only front runner then did not submit a letter of intent (LOI) by the March 31 deadline.


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