Summary of Ssangyong Motors incident

Disclaimer: The following is a totally unauthoritative personal translation of a blog that summarizes the Ssangyong Motors incident between 2004 and 2009. I chose this blog since this one contains all materials necessary to understand the background information why so many Ssangyong Motors workers commit suicide since the end of the whole incident in 2009. (Totally 17 killed themselves so far and possibly more in the future.) All rights concerning this post is reserved to the author of original blog and this site will be scrapped at their request. Original article (in Korean) can be located from the link at the bottom.

1. In 2004, Shanghai Automotive Industry Corporation (SAIC) took over Ssangyong Motors (SM)

Daewoo group, then mother chaebol of SM, could not bear the burden of loans of 80B USD and went bankrupt in 1999. Subsequently, SM, then the 4th car production maker in Korea, was listed for sale. Several companies such as BlueStar, SAIC negotiated with SM creditors and SAIC was finally selected to take over SM.

Many expressed concerns about this deal. They mainly pointed out that creditors assessed bidding companies not based on their ability to ‘run’ it but based on their ability to ‘pay’ for it. It was said that “SM sell out is an example revealing the sheer fact that creditors care only about money they will get from selling a company whatever the buyer’s intention is.” That is, SAIC will buy up only the technologies of SM cheap through this take over and will actually run the company itself faulty. This prediction turned out to be the case later.

2. In December 2008, The Korea Development Bank (KDB) warned SAIC for not fulfilling the fund supply it had promised at the time of buy up

SAIC laid off around 2,000 workers over 4 years time but did not develop any new car during that period, a clear example of faulty management. At this, KDB, the main creditor of SM, requested SAIC for fund supply to SM and expressed its intention to push forward a liquidation plan for SM if SAIC did not act along the request.

3. In January 2009, SAIC gave up the management rights for SM and filed bankruptcy for SM

On January 9, 2009, SAIC pulled themselves out completely from SM they had bought 4 years before with 510M USD. SAIC filed bankruptcy for SM and gave up their management rights for SM completely. Furious cries broke out for being ‘taken by another Chinese scheme for technology siphon off.’

4. On February 6, 2009, court receivership began for SM

Court decided receivership for SM on February 6, 2009. Court receivers expressed their intentions to first sell production facility for ‘New Roadius’, a city style multi-purpose vehicle, to Chinese companies through which they hope to secure necessary liquidity for revival and then to push forward a restructuring plan including salary cuts and massive layoffs. Before February, government did not mention anything whether they would revive SM or would bankrupt it.

5. KOSPI nosedive in March 2009

Wakes from subprime mortgage crisis finally brought down GM in US and the crisis loomed over SM as well. Under this circumstance, SM laid off 35 irregular workers who had declined voluntary retirement package and 350 other regular workers. Though dubbed as voluntary retirement package, they were all in fact forced to get laid-off by the company. From March 2009, about 80 members of SM irregular workers’ union started to fight along with SM regular workers’ union.

6. In April 2009, SM company revealed its self salvation plan .. big gap on the layoff plan from union

SM company announced a restructuring plan that would layoff 2,646 (37% of total workforce) on April 8. According to company’s plan, SM would first layoff 2,646 (37% of total 7,179 workers including about 300 office workers) and then would cut down the wages and welfare packages considerably, which would save expenses of about 232B KRW (200M USD). The layoff was known to cut down 45% of production workers, 21% of management/office workers, and 5% of research workers.

To company’s restructuring plan revealed on April 6, union announced its self salvation plan with 5 main items on April 7 through a press conference. They were (1) Company guarantees total employment through the job sharing scheme (2) Union secures 100B KRW (88M USD) emergency fund for the development and production of new car C200 (3) Company writes off SAIC’s 51.33% stakes of SM (4) Union supplies 1.2B KRW (1M USD) job security fund for irregular workers (5) Company requests KDB to inject priority emergency fund for the revival of SM.

So, company and union clashed by massive layoff vs job sharing for the salvation of SM.

According to an interview by Sang-gyun Han, leader of KMWU SM branch, on May 15, workers had not been paid for 5 months already (from the time SAIC’s faulty management had been exposed) at that time.

7. In May 2009, company submitted a layoff plan .. Union countered it with strike

On May 8, company submitted a layoff plan to Labor Relations Committee. They reported that they would let go of 2,405 workers which is about 240 smaller than the plan they had announced on April 8. This was because that number of office workers voluntarily retired already. The layoff plan would take effect after 30 days of submission. At this, SM union went on a partial strike from 2PM to 5:30PM, the end of daily work, at the same day.

After that, SM union continued partial strikes until May 20 and went on to general strike on May 21. One day after on May 22, SM union blitzingly took up the whole Pyeongtaek factory and continued strike. This is the start of 77-day long lock-in strike. Later on May 27, one SM union member who were part of the lock-in strike died of a stroke.

8. In June 2009, SM company shed 976 workers .. union revolted, “put public money in and make SM a state-run company”

On June 8, 30 days since layoff plan was submitted on May 8, SM shed 976 workers who did not retire voluntarily. Despite the coinage of the term ‘voluntary’, however, the retirement plan was in fact nothing but a coercive layoff and the total layoff toll became over 2,000, exceeding the number company had reported in their original layoff plan.

At this, emphasizing government’s role in selling off SM to SAIC in 2004 in the first place, SM union revolted “put public money in and make SM a state-run company.” As an actual example, US President Barack Obama put public money into near-defaulted GM and turned it into a state-run company. SM union’s struggle intensified after June 8’s restructuring execution by the company and several bloody incidents took place.

9. Violent suppression .. police’s containment strategy accelerated

On June 31, SM company damaged 3 tap water supply pumps to urge union members to leave the factory. Since then, tap water supply to the factory was cut until the end of the whole incident. On July 4, SM company filed a damage lawsuit amounting to 5B KRW (4.4M USD) against about 190 workers including union officials. Starting from July 6, SM company staged a series of solo protests in front of Blue House as well as many other government buildings demanding to breakup the lock-in strike by SM union. What SM company wanted from Blue House was a “strict law enforcement” against union’s long time strike. Later in the morning on July 20, SM company cut all water supply as well as gas supply to all Pyeongtaek factory. That day afternoon, one union member’s wife committed a suicide. On July 22, police used tasers against union members and one of them got his face stuck with a taser lod and wounded about 10cm long deep cut, experiencing a life threatening risk. The same day, police started to disperse tear gas liquids using low-flying police helicopters. In fact, a public demonstration of tear gas liquid actually evoked huge outcries of concern since it proved its ‘power’ by melting styrofoam containers. At the end of July, access by medical units and medical supplies are all blocked by police. They were allowed only in rare occasions. On July 30, Korea Human Rights Commission decided the condition under which SM union members were was a human rights violation and approved an emergency salvation plan by lifting bans on water supply, electricity, medical units to factory. However, the plan was not actually put into practice due to lack of cooperation from police and SM company.

10. On August 2, talks between company and union broke down and company further pushed forward the ‘kill-the-union’ plan

Closed door negotiations went on between company and union from July 30 to August 2 but company declared breakdown in the early morning on August 2. After that, company intensified its effort to enforce a perfect ‘kill-the-union’ plan. Police who gained control of building rooftops other than the paint shop no 2 were trying to break into the paint shop several times. People worried about this brute force crackdown effort tremendously since the paint shop no 2 was full of inflammable materials in it and any mishaps during police operation could result in another ‘Yongsan incident’ at no time. During that time, police continued to indiscriminately disperse tear gas liquids and both sides exchanged slingshots of iron ball bearing and bolts/nuts to each other. This hellish reckless police operation continued at least for 4 days.

11. On August 6, an agreement between company and union was finally reached.

On August 6, day 77 since the start of lock-in strike, SM company and union reached an agreement. Final agreement stroke out unpaid leave of absence for 48% and layoff for 52% of 974 whom the company announced to let go from the start. One SM union official cried to colleagues “We could not stop the layoff. We’re sorry!” on the police bus. Union members shouted slogans such as “Layoff is murder” and “Let’s abolish irregular jobs and let’s free labor from exploitation.”

12. But, is this a happy ending?

Media pour out a flurry of articles picturing the perspectives of SM and Pyeongtaek area with rosy blueprints after union strike. However, the whole situation is as gloomy as has been ever. The number of arrested SM union workers topped among union strikes since 1997 but none (as everyone expected) from company or police who wielded their own share of inhumane violence was arrested or prosecuted. A typical picture of disguised merciful government and police who act like their clubs.

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