News - SsangYong
SsangYong gets green light to rebuild
Aussie gearbox maker may be winner from SsangYong restructuring decision
25 May 2009
By IAN PORTER
IN a welcome development for the Australian parts industry, South Korean car-maker SsangYong has received court approval to pursue its restructuring plan.
The move raises hopes that SsangYong will proceed with production of its C200 medium SUV, using an Australian-made six-speed automatic transmission from Albury-based Drivetrain Systems International (DSI).
DSI has had its own battle for survival since big customer SsangYong went into receivership in January, but has emerged with a new owner and fresh prospects.
In South Korea, the Seoul Central District Court agreed with receiver Samil PricewaterhouseCoopers that SsangYong had more value as a going concern compared with being broken up and sold.
The company sought the protection of the courts as vehicle sales plummeted around the world because of the global financial crisis.
SsangYong still needs to raise about $US280 million ($A357 million) from one of its main creditors, the Korean Development Bank, if the restructuring is going to work. SsangYong now has to submit a detailed rescue plan to the court by September 15.
The new plan is more severe than expected. Directors initially indicated that one third of the 2650-strong workforce would be retrenched. That figure has now been raised to 1400 people, and union members responded by holding a sit-in strike at the Pyeongtaek plant, in Geyonggi Province.
The receivers and the company have to return to the court by September 15 with a detailed rescue plan that is supported by creditors and other stakeholders.
Through this period of uncertainty, SsangYong has pressed on with the final development of its new C200 medium SUV which is expected to be released late this year.
Left: SsangYong C200 concept.
UK SsangYong distributor managing director Paul Williams said the court decision and the restructuring plan meant SsangYong would be a leaner and more efficient company.
“We already know that there will be a broader range of passenger cars using the latest petrol, diesel and hybrid technology and the first – the C200 – will go into production later this year.”
SsangYong’s receivership in January in turn forced transmission maker DSI into receivership, as Ssangyong was one of its largest customers at the time.
Thanks to support from another large customer, Ford Australia, DSI was sold for a minimum of $47.4 million (depending on inventories at the handover date) to Chinese car-maker Geely and will be able to finish construction of a new production line which will make six-speed automatic transmissions suitable for east-west installations.
This is the transmission SsangYong will use in its upcoming C200 medium SUV.
Read more:First look: The car that could save SsangYong
Albury transmission-maker saved for $47.4 million
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