Kuo Kuang Motor Transportation Co was overdue in paying staff wages for the second time this year as cash flow this month declined to just NT$2 million (US$67,953), leading the company to delay last month’s salary payments until Tuesday afternoon.
The company has allegedly been juggling funds to pay workers' salaries, drawing speculation of a financial crisis.
Around the Lunar New Year, Kuo Kuang was unable to pay fuel costs, causing issues for CPC Corporation, while it was announced in February that the previous month’s salaries had not yet been paid by the company.
Photo: Taipei Times
Kuo Kuang is not in financial crisis, though the company’s operations have been affected and ridership has fallen since the pandemic, with many former customers instead opting for train travel with Taiwan High Speed Rail or Taiwan Railway Corp, Kuo Kuang general manager Jen Chi-nan (任季男) said.
The corporation is in talks with the Highway Bureau to improve services, he said.
Since the company’s current chairman took office, various improvements have been made, including efforts to increase profits, with revenue and expenditures having recently balanced out, he added.
The company is not facing losses, but a bank loan during the pandemic still requires ongoing repayments, he said.
The company would be able to pay next month’s salaries, he added.
Kuo Kuang is planning to reorganize its entire system and suspend 14 bus routes which have proven unprofitable, industry sources said, although Jen said he could not comment on any details.
Discussions are ongoing, though Kuo Kuang likely would need to scale back operations, Jen said.
Unprofitable routes include expressways and rural routes, and while Kuo Kuang had previously made a request to the Highway Bureau to cut certain routes, the government did not approve the proposal, a source from Kuo Kuang said.
The company intends to present the case to the bureau again and reorganize the network, they said.
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