[Photo by Lee Seung-hwan]
Factory workers of South Korea’s SsangYong Motor Co. under court management will rotate to go on unpaid furlough for up to two years that will have the effect of halving the workforce without having to lay off any to lighten the cost burden for a new buyer.
The self-restructuring scheme gained a vote of approval by 52.1 percent of SsangYong Motor’s 3,224 unionized members, or 1,681 workers, the company announced Tuesday.
Workers accepted the scheme for pain-sharing. About 17 percent of current workers are eligible for retirement in the next five years, and 45 percent in the next 10 years.
Under the outline, half of assembly line workers and 30 percent of office workers will become off duty for a year. The management and union will re-negotiate and decide whether to continue the program beyond a year depending on vehicle sales.
The list for the first furloughed will be decided within the month to go into practice from July 1.
The pay cut and suspension of welfare benefits agreed in 2019 would be extended to June 2023. Senior executives will return additional 20 percent from their annual salary, which will cut their annual paycheck by 40 percent.
Unions pledged not to strike until business returns to normalcy. The binding period for the collective bargaining terms will be stretched to three years from current two years.
SsangYong Motor expects the new self-rescue measures can help it cut fixed costs and ease the financial burden on a new potential investor.
“The company aims to speed up the M&A process with the rehabilitation scheme to establish the basis for long-term survival,” said Jung Yong-won, court-appointed manager of SsangYong Motor, adding that the SUV-focused company will come up with detailed eco-friendly vehicle plans for future growth.
The carmaker holds the first meeting to discuss detailed timetable for its sale on Wednesday with an aim to invite tenders by the end of June. It is planning to pick four to five contenders eligible for due diligence by late August.
After collecting detailed investment proposals, SsangYong Motor will name a preferred bidder by late September to proceed with price negotiation and complete the sale process by the end of October.
By Seo Dong-cheol and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]