Late last month we reported on SsangYong’s woeful financial position, which you may remember included having to defer paying workers’ salaries coming into Christmas. In a letter to employees in late December, SsangYong admitted to its difficulties, telling them the company “is expected to post a deficit of more than W100 billion (AUD$114 million) this year alone”.
Things are set to get a whole lot worse in the near future it seems. Reports indicate that SsangYong is facing liquidation if operating capital cannot be secured from parent company Shanghai Automotive Industries China (SAIC), who holds a 51 percent controlling interest.
The Korea Development Bank (KDB) is looking for a total of around USD$250 million in direct aid and a guaranteed capital injection from SAIC. If these funds continue to be withheld - there are political issues at work here - then KDB said it will consider refusing SsangYong further finance.
This could ultimately lead to the liquidation and complete shutdown of SsangYong, which produces 200,000 vehicles annually and has over 7000 employees.
It’s now a desperate situation with SsangYong having already halted production in the second half of December due to flagging sales. Only 3835 vehicles were sold in November, down 63 percent from the same time last year. Total sales have fallen 27 percent this year as SsangYong continues to amass debt.
SsangYong and SAIC are struggling in negotiations over the new capital needed. Things have been complicated by a demand from SsangYong’s labor union that company management step down and a protest outside the Chinese Embassy in Seoul by the union. SAIC is reported to be demanding wage cuts and the axing of at least 2000 production line jobs, putting the Shanghai parent on a collision course with the union.
We’ll keep an eye on this story as it unfolds. While some of you may not lament the loss of SsangYong from the automotive industry, spare a thought for its 7000 or so employees. We’ve got our fingers crossed there’s light at the end of the tunnel.
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Good riddance. I dont think there was any danger of sang yong releasing any good cars in the future anyway… enough cheapo brands going around as it is…..
Without doubt the ugliest range of cars on the planet!
They may be ugly, but they also use Australian made 4 & 6spd automatic transmissions from DSI (formerly Ion). So this loss will hurt some Australians too…
“Ssangyong, you were too ugly for this world, and possibly even the next”
Phil C made comment on the plight of DSI. Having a first hand knowledge of DSI, I would have to say the blame for DSI’s plight lies in its origins to ignore FORD Australia (like the ugly girl at the dance!) and chase after the very ugly Ssangyong. Someone must have had his beer goggles on (more than once!)…
Ford asked DSI to develop/produce a transmission which could handle the power across its range of engines and DSI rather impolitely said no! Ford had little option than to adopt the ZF trans into the majority of its Falcon/Territory range.
Some time later (now) DSI is not travelling too well with the decisions of its past which ultimately will be paid for by its remaining 350-400 workers in Lavington (Albury)
Bob Loblaw.
Bob…what where DSI thinking? Choosing a cheap Korean brand of a Major company such as ford…i will agree they did have there beer googles on!
Simply consider this:
The same people that ran ION into the ground are the same people running DSI now- with the same corporate attitude- “ask us no questions- we’ll tell you no lies…”