South Korea's government has urged SAIC Motor to "make efforts to revive" Ssangyong Motor, Reuters reports. The Korean automaker is struggling as sales slump and wages of over USD20m reportedly remain unpaid.
Since 2004, SAIC has spent around USD500m to accumulate a 51 per cent
stake in Ssangyong, but is now reluctant to invest more capital in the cash-strapped
automaker. Korea's fifth-largest car producer is experiencing sales
declines of over 50 per cent year-on-year. In December, Ssangyong said
it had to delay wage payments, which are as high as USD21m, according
to Australian automobile media.
The Korean government urged SAIC to "make efforts to revive" Ssangyong
and said governmental support cannot be expected. "[We have] to abide
by WTO standards [and] can't provide financial assistance to select
private companies." SAIC executives said the Korean government "has been uncooperative" to support the automaker.
Last week, Ssangyong filed for court protection to avoid bankruptcy. A court decision is expected this week.
Last update : 12-01-2009
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