Filed under: China, Hirings/Firings/Layoffs, Earnings/Financials
Could it be too late for Ssangyong? Shanghai Automotive Industry Corp. (SAIC) appears to have given up on Ssangyong Motor Co., allowing the company to slip into receivership. SAIC holds a 51% stake in Ssangyong, but gave up management rights in a bid to avoid liquidation and allow Ssangyong some time to get back in the black. The Korean automaker's Chief Executive Zhang Hai Tao and President Choi Hyung-tak both stepped down after the filing.
As recently as a couple of days ago,
SAIC said they would help prop up Ssangyong, but that apparently has changed. As vehicle sales have fallen a whopping 50%, money was clearly tight. With the global economic crisis, credit was evidently unavailable to pay workers and new negotiations with the unions weren't going anywhere fast. This receivership agreement protects Ssangyong from creditors and keeps it from entering bankruptcy, allowing it some time to get back on its feet. For its part, SAIC said that it "will work with all parties so that Ssangyong can achieve a plan to normalize its operations."
Thanks for the tip, Ken![Source:
Market Watch]
Ssangyong enters receivership originally appeared on Autoblog on Fri, 09 Jan 2009 17:29:00 EST. Please see our terms for use of feeds.
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10-01-2009, 01:40 AM
