SAIC seeking Korea support for Ssangyong

SHANGHAI, Dec 29 - China's SAIC Motor Corp and Ssangyong Motor are seeking support for the troubled South Korean auto maker from the Korean government and banks, the Chinese company said on Monday.

SAIC, which owns 51 percent of Ssangyong, also said the two companies were discussing with union representatives how to cut the Korean firm's labour costs.

"At present SAIC and Ssangyong are actively seeking support from the Korean government and banks," SAIC said in a brief statement.

It did not elaborate on the nature of any support, and did not say whether SAIC itself might provide fresh financial assistance to Ssangyong.

Last week, an official at state-owned Korea Development Bank (KDB) said the bank had urged SAIC to provide Ssangyong with 120 billion won ($93 million) in cash in return for the transfer of technology. KDB also called on SAIC to guarantee a combined 200 billion won worth of loans from two Chinese banks to Ssangyong. The KDB official said his bank would be willing to consider extending new loans to Ssangyong, but only if SAIC first granted assistance to the Korean company.

Ssangyong, which makes the Rexton and Kyron sport utility vehicles and ranks fifth among South Korea's automakers, said in mid-December that it was halting production until the end of this month because of slumping auto sales.

In November it sold 3,835 vehicles, down 63 percent from a year earlier, while monthly sales by all South Korean auto makers fell 8.6 percent.

The Korea Economic Daily on Monday quoted a KDB official as saying Ssangyong might be liquidated unless SAIC injected money and the Korean company cut its workforce and announced new car plans.


No comments: