Ssangyong online after 11 weeks

PYEONGTAEK - Ssangyong Motor Co.`s Pyeongtaek plant resumed operations for the first time since the 77-day sit-in strike began on May 22.

"First, the company will complete the restructuring process and focus on drawing up revival plans that will be accepted by the court and the creditors by Sept. 15," co-court receivership manager Park Young-tae said before the official start of the working day.

He said that the company will also complete the process of securing additional funds within the week and implement measures that will normalize sales and maintenance networks.

Although some window panes in the main building remained broken, there was no glass on the floor and most of the damage caused by the sometimes violent strike appeared to have been repaired, with production facilities back in full working order.



Starting with a unit of the luxury sedan Chairman W, the company was to produce 74 vehicles yesterday - 28 sedans and 46 sport utility vehicles.

Ssangyong`s managing director Choi Sang-jin said that if the company sells about 4,500 units a month for the rest of the year, this will be sufficient to cover operation costs and put some cash back into the company.

"The 4,500-unit monthly sales target, 2,000 units on the local market and 2,500 exports, is realistic and sales of 21,000 units is possible during the remainder of the year," Choi said.

"Adding that to the 13,000 units sold until July, there is little cause for concern whether the company will be able to meet the 27,000 unit output indicated in Samil`s report."

In its report, Samil PricewaterhouseCoopers, an accounting firm, indicated that the liquidated value of Ssangyong is less than its continuation value, given that the company`s output exceeds 27,000 units this year.

However, Ssangyong is not yet home free. Although it has managed to secure 130 billion won ($105 million) from its main creditor Korea Development Bank to cover the costs of restructuring, the company still needs to raise a similar amount to complete developing a new car, codenamed SUV C200.

"The C200 is Ssangyong`s new hope, so we will try to raise funds through various routes including selling some of our real estate," Park said.

"Launching the vehicle within the year will be impossible and a definite schedule can`t be given, but we will try to launch the vehicle as soon as possible."

In addition, the government is said to be unwilling to lend a helping hand until investors capable of running the company present themselves.

Analysts said that finding an investor to take control of the beleaguered company may not be as simple as it sounds, as the intentions of foreign companies that have shown interest in Ssangyong during the strike are now said to be unclear.

But Ssangyong`s co-court receivership manager Lee Yoo-il expressed confidence in the company`s ability to attract new investors.

"This is not yet the time to speak of investors, but I am confident that investors will appear," Lee said.

"We are not restricting the search to local or foreign operations, and any company capable of normalizing Ssangyong will be considered."

The troubled SUV-specialist`s suppliers are facing even more dire problems.

"Our position is somewhat different from Ssangyong as we are the only ones to have sustained financial damages. All the equipment damaged by the strike belonged to suppliers and Ssangyong`s assembly lines have not sustained any damage," said Choi Byung-hoon, who represents some 600 of Ssangyong`s suppliers. He added that suppliers have sustained 200 billion won worth of damages due to the strike and that many of the suppliers have halted production and cut their payrolls by up to 40 percent. Others are on the brink of bankruptcy, he said.

"The government and the KDB need to realize the seriousness of the suppliers` situation and implement measures or many suppliers could go down in a series of bankruptcies."

(cheesuk@heraldm.com)



By Choi He-suk