Ssangyong also continues to seek to expand its lineup, which currently consists entirely of recreational vehicles and luxury sedans ―- both of which are particularly sensitive to economic conditions ―- that may go some way to explain the company being hard hit by the economic downturns of 1998-99 and 2008.
“Plans for small cars are in the works, but there is nothing solid going on at present, and since Mahindra has now taken over, decisions will be made with regard to synergy with Mahindra,” Park said.
Park also projects that its connection with Mahindra will open up the Indian market within the year, where the company is considering the Korando C and the Rexton SUVs as its lead vehicles.
“I think CKD exports to India can begin within the year, and, as Mahindra already has all the necessary facilities, going into India will not require investment,” Park said. He added that as exports to India will be in knockdown kits, they will not place additional burden on the company’s production line.
He is also optimistic about the benefits gained from Mahindra’s sales network.
“Mahindra is famous for tractors and other agricultural equipment, and I have been informed that the company has a strong sales network, and I expect some efforts to aid our sales through that network,” Park said. As for Ssangyong’s existing sales network, Park said that while there are no plans to merge it with that of Mahindra at present, he is of the opinion that maintaining it at extra cost may not be necessary.
Its first new model in Korea in three years, the Korando C, launched in February.
With much riding on the vehicle, the company set an ambitious sales target of 20,000 units for this year, which is equivalent to around 66 percent of Ssangyong’s 2010 sales, and about a third of the figure for 2007, before the company became mired in financial troubles.
“I don’t think the targets are unrealistic. The current environment is unfavorable with high oil prices and unstable exchange rates, but Korando C will be our first compact RV, which from some perspective makes it a good match for current developments,” Park said. He added that Ssangyong is now turning its focus to markets to which it had previously given little attention.
“A market that does well when oil prices rise is Russia, and our CKD business in that country is doing very well. The South American markets, especially Brazil, also look very good. The company is shifting the focus from Western Europe, which has an economic structure that requires time to recover.”
The company is not home free yet, however, with the issue of those who left the company or are on unpaid leave continuing to plague the SUV specialist.
Since the sit-in strike was ended, more than 10 former Ssangyong workers, family members of workers or those on unpaid leave have taken their own lives or died from stress-related causes.
As such, some non-government organizations and politicians have assigned the blame for the deaths to Ssangyong, and have been demanding that the carmaker make good on the agreement made in August 2009.
At the negotiations that brought the strike to an end, about 460 workers were reportedly put on unpaid leave to be reinstated when the company’s operations had normalized in one year’s time, which came and went in September 2010.
Park, however, says that such reports are incorrect.
“The agreement was to reinstate once it was possible to run a two-shift system,” Park said, adding that a carmaker’s need for workers increases along with production volume, but that Ssangyong’s output remains insufficient.
“Line one produces the Korando C, but it has until recently been offline, and line two still remains idle for a lot of the time. Only line three is in full operation. It (reinstating workers) is not possible at this time.”
Having been the management’s main negotiator in the strikes two year’s ago, Park has much to say about the issue and labor-management relations of Ssangyong’s past and present.
“The most difficult things (in the negotiations of 2009) were rebuilding lost trust. And adhering to law and principles, even the government told me to settle. I can’t tell you who, but I was told that I can’t do something that does not exist in Korea and to reach settlement quickly,” Park said.
“I think that a company and the management also play a role in creating a hard-line union. If you don’t stick to rules and principle for the sake of immediate convenience, there will be corruption, and that requires a stronger union to be born. And as that process repeats, a hard-line union is created. But now Ssangyong’s union is rid of such practices,” Park said. He added that the purpose of a union is to protect the rights of the workers, but that must come with quality and productivity, a requirement that has often been ignored in Korea.
“The company and the management must be transparent. If that is given, I think the company will win every time if there is friction with the union. We have been doing well so far, but I think establishing Korea’s leading company in terms of advanced labor-management relations is also part of the reason for the company’s existence.”
By Choi He-suk (email@example.com