Shanghai Automotive Industry Corp (SAIC) announced yesterday that the firm is intensifying its efforts to end strike action at Ssangyong Motor Co, South Korea's fourth-largest automaker, which is owned by SAIC.

 

The trade union at Ssangyong Motor launched the strike on Friday to protest at SAIC's package of job cuts and its alleged attempt to transfer technology from South Korea to China.

 

"We are optimistic about reaching an agreement to end the strike at Ssangyong Motor Co," said the SAIC statement.

 

SAIC spokesman Bai Mei told China Daily yesterday that SAIC is in talks with Ssangyong management and staff in a bid to end the dispute.

 

However, an indefinite strike was due to start yesterday, the Korea Herald reported.

 

Bai said production at Ssangyong Motor has been suspended. Market analysts estimate a loss in output of 10,000 units due to the disruption to production.

 

SAIC has appointed former GM executive Philip Murtaugh as Ssangyong's new representative director to monitor the South Korean firm on behalf of SAIC.

 

In 2004, SAIC acquired a 48.92 percent stake in Ssangyong Motor and increased its share to 51.33 percent last year, aiming to revive the troubled automaker and strengthen its presence in the industry.

 

Earlier this year, SAIC announced a US$2.5 billion five-year investment package for Ssangyong Motor, planning to boost its annual output to 340,000 vehicles by 2010.

 

However, a massive layoff plan came before the promised investment, with the announcement in July of plans to cut 1,000 jobs and transfer part of Ssangyong's production capacity to China.

 

SAIC and Ssangyong also signed an agreement earlier this year that will see SAIC use Ssangyong's engine technologies and design capacity to develop its own vehicles, scheduled to hit the market by 2008.

 

(China Daily August 15, 2006)