SsangYong back on song – for now
BY MARTON PETTENDY AND RON HAMMERTON | 10th Aug 2009
SsangYong says it plans to resume production at the Pyeongtaek factory 70km south of Seoul by the end of the month, which is good news for Australian SsangYong distributor Sime Darby as it runs low on stocks of the Sports ute.
Sime Darby Motors Group Australia (SDMGA) managing director Rob Dommerson this week advised local SsangYong dealers of the good news.
“The end of the strike is the news we were waiting for and another major milestone on the road to resolving the SsangYong receivership situation.
“Now that they’ve returned to work, production should be back in a couple of weeks, thus generating revenue for them and giving their customers access to the stocks we need to keep the business going.
“This milestone may also now allow them to get access to the funding they need to endure the worst financial climate that the world has seen for decades,” said Mr Dommerson.
SsangYong said damage to its Korean facility had been minimal, however, the company remains in receivership and still has to submit its recovery plan to Korean courts by mid-September under a timetable set down after it was placed in administration in February.
That plan will be critical to the survival of the company, whose problems were compounded by the strike and siege that cost $US258 million ($A308m) in lost production.
“Hopefully in the lead up to the next creditors meeting on or before September 15 we’ll get some further good news and an understanding of when we’ll see a final resolution to the situation,” said Mr Dommerson.
“The progress is encouraging and we remain hopeful that SsangYong will survive this situation.” The latest SsangYong development should also come as good news to Albury-based transmission manufacturer DSI, which has been asked to resume supply of six-speed automatic transmissions for SsangYong’s Kyron SUVs and was to have received $500,000 to continue development on a front-drive six-speed unit for use in the new C200 compact SUV.
Mr Dommerson said the resumption of production would take place just in time to avoid stock shortages of the brand’s SUV in Australia, although supplies of the Sports ute have almost dried up.
“We are very tight on our utes,” he said. “(But) we do have some stock of our SUVs and we think that’s just enough to last.
“We expect the factory will be back on track in the next couple of weeks, probably satisfying the local market first and then following on with us. So stock is going to be tight for the next couple of months but we think we’re going to be okay.” SDMGA sold 148 SsangYong vehicles in June in Australia and about 50 more in July.
Hundreds of unionists seized the SsangYong plant in protest at a decision by 51 per cent owner Shanghai Automotive Industry Corporation (SAIC) to slash 36 per cent of the workforce to make the operation more efficient.
Armed with steel pipes and Molotov cocktails, the protestors threatened to set fire to one of two paint shops loaded with flammable materials if the factory was stormed.
Some protesters accepted an offer by authorities of leniency if they ended the illegal occupation, but more than 600 were still on the factory when police firing teargas stormed in, led by commandos who dropped from a helicopter on to the roof.
Bloomberg news service reported that three protesters were taken to hospital after the raid, and smoke was seen rising from burning tyres around the plant.
Adding to SSangYong’s woes, a group of creditors have filed a petition to courts requesting that the firm be liquidated.
