Due to Cash Shortage
The management of SsangYong Motor told the labor union on Jan. 21 that it is difficult to pay some of the employees’ wages in January and February. The notice came one day before the start of the negotiations on the sale of the struggling company.
SsangYong Motor receives parts from some of its suppliers by paying cash. A deterioration in cash flow forced the company to delay wage payments.
SsangYong Motor sent an official letter to the labor union about its plan to put off wage payment in January and February. Upon receiving the request, the union's executive branch held a meeting of representatives on the same day to discuss the matter.
The wage delay idea surfaced recently as SsangYong Motor's liquidity problems worsened. At the end of 2020, some suppliers refused to deliver parts when SsangYong Motor filed an application for corporate rehabilitation with the court. As a result, SsangYong Motor was forced to shut down the Pyeongtaek plant for two days. In response, SsangYong Motor decided to receive parts by paying cash on a daily basis without extending its official delivery contracts.
"The troubled automaker can survive only when its factory continues to produce cars and earn a profit by selling them. So workers should understand the company’s situation," an industry watcher said.
Meanwhile, the conclusion of negotiations on the sale of SsangYong Motor is expected to come out on Jan. 22 at the earliest and Jan. 28 at the latest. "The sale negotiations had been held two to three times a week but are held on a daily basis these days,” an industry insider said. “The specific terms and conditions of the sale are under discussion. The results will come out within January."