SsangYong Motors and the Price of Redundancy
August 29th, 2009
photo credit: AP/Ahn Young-joon
It seems every day that another company is either going into bankruptcy, being taken over by the government or their workers are on strike. As the recession bites, trade unions are beginning to play their part again in securing the rights of their workers; in SsangYong Motor’s located in South Korea this is no different.
However the situation in South Korea is a bit different from your average strike. Formed in 1954 SsangYong Motor’s is Korea’s fourth largest automobile producer and was put into receivership in January of this year. The automaker recently revealed they lost $155M in Q2 of this year. The recession has almost recreated a social hierarchy throughout the world; the corporate bosses at one end and the workers at the other. There is almost a feeling in some circles that the workers just have to grin and bear the struggles they face. The workers at the SsangYong Motor Company in Seoul decided enough was enough.
After 900 employees were laid off, they rebelled. They occupied the factory for more than 70 days halting production and output. They fought constant and running battles with police that escalated into systematic violence involving fire bombs and steel pipes. The worker unrest cost the automaker $255M US in lost production. Sadly this harks back to a few decades ago when worker militancy was all too common. Thankfully, however, the workers at SsangYong have since agreed to end their factory occupation and accept a redundancy package of sorts. Those who had been made and refused to take redundancy will now receive a period of unpaid absence.
It is hard what to make of this situation. On one hand it is becoming frightfully common and with redundancies, 3 day working weeks and job losses widespread - should we not allow the workers to stand up for themselves? However at what point do they take it too far? Should we openly condemn the actions of the SsangYong Motor Company workers or applaud them for ‘standing up to the man’? It is a worrying situation and, one suspects, SsangYong will not be the last place we will see it.
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Financial crisis last year was not the major issue for Ssangyong case. the company was going down hill since it was sold to Chinese car manufacturer “Shanghai Motors” back in early 2000. Late 90’s and Early 2000’s there were few big changes in Korean automobile industry. Kia was sold to Hyundai ,Daewoo sold to GM and Samsung Motors sold to Renault-Nissan Alliance. Yet Ssangyong’s SUV lines were pretty decent and it was better than Hyundai’s at the time but the company wasn’t attractive enough to become like Daewoo or Kia. Later Ssangyong was sold to Shanghai motors and after few years under Shanhai ownership, Shanghai consumed most of Ssangyong’s technolgy without any R&D investment and Shanghai claimed to exit from Ssangyong last year. Too bad for their employees but they were the one who sighted what exactly happened last few years and if they were start enough, they should have had the exit plan. I was grown up with Musso and Korando which were most well known ssangyong vehicles for Koreans however I hate to say this, Company was dead after Financial crisis in Korea, 1997(aka IMF)