Ssangyong out of money, $77 million in the Red

Wow, we are living in some harsh times with the current economic crisis in full swing and it appears that no matter where you are - if you are in the 'car business', you are in the front lines. I hope this becomes a lesson to other companies.
Ssangyong Unable to Pay Staff

Korea's smallest carmaker Ssangyong Motors on Sunday said it cannot pay December salaries, which were due on Wednesday. Domestic carmakers saw a steep drop in sales in due to the worldwide economic crisis, but this is the first time a domestic automaker has failed to pay workers the money it owes them.

In letters to staff sent Friday, Ssangyong said, "The company is expected to post a deficit of more than W100 billion (US$1=W1,292) this year alone. Due to lack of operating funds for December, it is impossible for the company to pay salaries any longer."

It had asked the head office of its parent company Shanghai Automotive Industry in China for emergency operating funds, but the request was turned because the in-house union had called for Chinese executives to resign, Ssangyong said. Shanghai Automotive took over Ssangyong in January 2005 by buying 48.9 percent stake, bringing holdings to 51.3 percent. Ssangyong employs about 8,000 staff -- 2,500 white-collar workers and 5,500 production-line workers.

The Ssangyong executive committee plans a protest rally against management in front of the company's Pyeongtaek plant in Gyeonggi Province at 8:30 a.m. on Monday.

Ssangyong began suspending the operation of all plants, including the Pyeongtaek plant, for three weeks last Wednesday. On Dec. 12, Ssangyong drastically downscaled its entire organization by merging the domestic business division, the overseas business division, and the services division into a single one, and fired a dozen key executives. A Ssangyong executive said, "The company will conduct an additional round of restructuring focusing on its business departments."

With domestic sales dropping 34.5 percent from January until November, the number of Ssangyong's dealerships has shrunk by about 60, from 237 early this year to the current 180. November sales alone fell by 63 percent year-on-year.

Source (via www.autoblog.com);
http://english.chosun.com/w21data/html/news/200812/200812220004.html