A Belt-tightening Scheme for Survival
SsangYong Motor's unionists have approved the company’s proposal for belt tightening. The struggling automaker, which is undergoing court-managed rehabilitation procedures, said on June 8 that 52.1 percent (1,681) of the 3,224 union members voted for the survival plan.
Earlier, SsangYong Motor mapped out a belt-tightening scheme, which proposes unpaid leave for 50 percent of blue-collar workers and 30 percent of white-collar workers. The plan calls for extending the unpaid leave for another year, depending on the car sales after one year of implementation. A wage cut and the suspension of benefits agreed upon in 2019 will also be extended by two more years until June 2023. Executives' wages will be reduced by an additional 20 percent on top of the previous 20 percent cut.
The plan extended the effective period of collective agreements from two years to three years. The labor union agreed to an efficient operation of human resources for production and promised no labor disputes. Four additional idle assets will be sold off.
Analysts say that the belt-tightening plan represented the last chance for stakeholders to confirm SsangYong Motor's will to survive.
Meanwhile, SsangYong Motor received court approval for its plan to pursue an M&A and selection of a consortium consisting of EY Accounting Firm and Law Firm Sejong as lead managers of its sale to a new investor on June 7. The automaker is expected to announce a tender for its sale at the end of June.