The union of South Korea’s ailing automaker Ssangyong Motor yesterday called for its members to go on strike in protest over potentially massive layoffs by its Chinese owner.
The union said in a statement that workers at Ssangyong Motor would vote yesterday and today to decide if they would stop work.
Ssangyong is falling into a financial crisis amid slow auto sales and a dearth of operating funds from its parent, Shanghai Automotive Industry Corp (上汽集團).
The union said management was forcing workers to sign up for a written resolution aimed at making job cuts much easier and buying time to transfer auto technology to the Chinese parent company.
“Only overwhelming support for strike can guarantee our survival. Only a landslide vote for strike can thwart the conspiracy of the Shanghai capital,” read the union statement.
Last month, Seoul’s JoongAng Ilbo newspaper reported that Shanghai Automotive had offered to axe 2,000 jobs, almost a third of the Ssangyong workforce, for providing a US$200 million credit line.
Ssangyong management denied having worked out a layoff plan, but another economic daily based in Seoul said the planned redundancies would be 3,000.
Ssangyong failed to pay workers on time last month, but has not so far received funds from Shanghai Automotive.
The Chinese parent has sought support from South Korea’s government and local creditors, including Korea Development Bank which has refused to offer new loans unless the Chinese firm helps first.
Ssangyong has a total of 7,100 employees, of whom 5,100 are assembly line workers. It was acquired by Shanghai Automotive in 2004.
The Chinese owner is known to have demanded wage cuts and redundancies at Ssangyong, but no details have been given. It has reportedly been threatening to abandon the automaker this month unless its demands are met.