SEOUL, April 20 (Korea Bizwire) — SsangYong Motor Co. and its union on Monday signed a wage deal for the year amid the rising impact of the coronavirus outbreak on the automobile industry.
SsangYong workers agreed on a wage freeze as they see stable labor-management relations as key to putting the company back on track amid virus worries, the company said in a statement.
The maker of the Korando and G4 Rexton sport utility vehicles sealed a wage deal with the union for the 11th consecutive year without strikes since 2010.
The wage deal came amid worsening performance at home and abroad.
SsangYong has struggled with worsening performance since 2017, when it shifted to a net loss of 66 billion won from a net profit of 58 billion won the previous year.
In 2018, its net losses continued, reaching 62 billion won.
In 2019, SsangYong’s annual sales fell 6.5 percent to 132,799 vehicles from 141,995 units a year earlier due to lower demand. Earnings results for 2019 will be released in the coming weeks.
From January to March, sales fell 31 percent to 24,139 units from 34,851 in the year-ago period.
SsangYong’s lineup is composed of the flagship G4 Rexton, as well as the Tivoli, Korando and Rexton Sports.
In its own rescue measures, SsangYong already cut some welfare benefits for employees in September last year and some of their wages and bonuses in December.
Adding to its woes, its Indian parent firm Mahindra & Mahindra Ltd. recently decided not to inject 230 billion won into the Korean unit as it also faces financial difficulties due to the virus outbreak.
Instead of the proposed 230 billion won, Mahindra said it would consider a “special one-time infusion” of up to 40 billion won over the next three months to help SsangYong continue operations.
But it is still unclear wether the one-time injection will help the financially troubled company.
In bankruptcy proceedings in March 2011, Indian carmaker Mahindra & Mahindra Ltd. acquired a 70 percent stake in the carmaker for 523 billion won as part of its globalization strategy.
Mahindra currently owns a 74.65 percent stake in SsangYong Motor after two rounds of rights issues worth 130 billion won since 2013.