It isn’t just foreign companies that have a robust history with Korea’s militant labor unions. The troubles of GM Korea and SsangYong Motors have been well documented over the last decade. This week SsangYong Motors finally succumbed to the pressures of the Korean market. The company filed for bankruptcy after defaulting on loan repayments of 60 billion won ($54.4m USD).
SsangYong is unlikely to receive further government support, with the national government unlikely to step in to provide aid for a company backed by overseas investment. While the idea of saving jobs will appeal to local lawmakers, they’ll be conscious that GM Korea and Renault Samsung could come asking for further handouts should they choose to save SsangYong.
Indian parent company Mahindra & Mahindra has done its best to resurrect the brand in Korea, but the company continues to suffer losses. SsangYong hasn’t posted a profit in 15 quarters.
The company directly employs more than 5,000 employees and 240 suppliers within Korea. As SsangYong now has three months to look for a buyer, it will be interesting to see how other foreign-owned car manufacturers in Korea respond to the situation heading into 2021.
We shall update the reader when more becomes known on this issue.
- SsangYong Motors files for Bankruptcy in Korea
- Corporate Bankruptcy/Restructuring in Korea: The Line Begins Here (Korea’s Chapter 7 & 11 Bankruptcy)
- Is a Bankruptcy in the U.S. “Effective” on Assets in Korea?: Korean Bankruptcy Law Basics
- Korean Bankruptcy Court in Seoul, Korea Established
- Ssangyong’s Korean Bankruptcy/Rehabilitation Proceeding & Many other Korean-based Construction Companies
- Collecting an Unpaid Invoice from a Korean Bankrupt Debtor
- Amendment to the Korean Foreign Investment Promotion Act 2019 – Investment Incentives in Korea
- Starting a Company in Korea: Establishing a Foreign Capital-Invested Korean Company, Branch or Liaison Office
- Involuntary Dissolution of a Company in Korea: Shareholder Disputes in Korean Companies
- Korea’s Blundering Natural Resource Development Policy