Ssangyong Motor resumes work after unrest

SEOUL, Aug 13, 2009 (AFP) - Ailing South Korean automaker Ssangyong Motor resumed production Thursday after an 83-day hiatus caused by a crippling and violent strike, company officials said.

It took six days for a clean-up after police ended a 77-day occupation of the plant in protest at mass redundancies. More than 100 people were hurt in clashes last week which left parts of the premises resembling a war zone.

"The passionate efforts by the staff and workers that enabled us to resume production today after only a week's preparation will serve as a great momentum for the company's turnaround," Lee Yoo-Il, a court-appointed manager, said in a statement.

He said the company would complete a redundancy programme and submit a rescue plan to creditors for their approval by September 15.

"Learning from the past hurtful experience, we will try to find an outside investor who is interested in long-term development of the company," Lee said.

South Korea's smallest automaker received court protection from creditors in February in exchange for a turnaround plan that calls for massive layoffs and cost savings.

China's Shanghai Automotive Industry Corp. retains a 51 percent stake in the company but lost management control when the firm won protection from bankruptcy.

Unionists refusing to accept layoffs had battled riot police with giant catapults, firebombs and steel pipes at the plant in Pyeongtaek, 70 kilometres (43 miles) south of Seoul.

The violence clouded prospects for the carmaker's survival and cost nearly 316 billion won (258.3 million dollars) in lost production. Dozens of workers have either been arrested or face arrest.

President Lee Myung-Bak expressed shame Tuesday over the violence, which he said had seriously damaged the country's image among foreign investors.

Ssangyong Motor says it expects to produce 2,600 vehicles this month and roughly 4,000 per month from September.

The state-run Korea Development Bank announced Wednesday financial aid of 130 billion won to Ssangyong, which specialises in gas-guzzling sports utility vehicles and luxury sedans.

Analysts said the aid falls far short of putting Ssangyong back on track and even additional financial support may not guarantee its future.

"The biggest concern is that few customers are expected to buy Ssangyong's vehicles even if it comes up with a new model," Ko Tae-Bong at IBK Securities told Dow Jones Newswires. 

Source: AFP

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