A Parts Supplier in China Suspends Operations
SsangYong Motor may have to shut down its production lines due to the disruption of its global supply chain amid the spread of the Wuhab coronavirus. A Chinese plant which supplies wire parts to SsangYong Motor is planning to stop production until Feb. 9 due to the Wuhan pneumonia outbreak.
Leoni Wiring Systems Korea, which runs a manufacturing plant in Yentai, Shandong of China, recently told Ssangyong that it will discontinue wiring parts production by Feb. 9, SsangYong Motor said on Jan. 30. The Yentai City government has recently announced a ban on plant operations until Feb. 9 due to the rapid spread of the new coronavirus.
SsangYong Motor's inventories will be depleted on Feb. 3. The company plans to procure wiring parts from a Korean company after using up the inventory of the Chinese plant. However, if this plan does not work, the company plans to suspend production for 4 to 12 days.
If SsangYong Motor halts its production due to a disruption in parts supply, workers will receive a down payment. The Labor Standards Act states that if a company suspends its business due to an employer’ faults, the employer must pay workers over 70/100 of employees’ average wage during the period of the business suspension. However, if it is impossible to continue the business due to unavoidable reasons, it may pay less than 70 percent of the wage to employees for the business suspension.