▪SYMC on the right track in its revival plan by restructuring, cutting down on fixed cost and improvement of productivity.
▪Better labor-management relationship is key to regaining its competitiveness.
▪Ready to retake the market with new product portfolio.
▪Pounding the ground to realize long-lasting growth by strategic alliance and M&A.
Ssangyong Motor Company (www.smotor.com) announced its mid-and-long-term revival plan, at the press interview that was arranged on October 18th which included the test drive event of the MY2010 Chairman W. The plan includes the execution of its business normalization and its turn-around strategy.
Since it resumed normal operation, SYMC has enhanced productivity by realigning its manpower, stabilizing its production line and improving operational efficiency particularly in overtime and holiday work, and it has finally shown a clear sign that the company has completely overcome the shock from the 77-day strike with a record monthly sales in September and the forecast annual sales exceeding the previous report by 16 percent.
It has also successfully streamlined the company. With sharing the burden as agreed between the management and laborers (cut down on wages, suspension of some welfare benefits, etc), improvement of production efficiency (90% of operation rate, absence rate lower than 1%), the fixed cost has been lowered by 37%. As an effort to secure short-term liquidity, the company is also trying hard to sell off some of its assets.
It also showed its strong commitment to labor-management cooperation by becoming the first automobile manufacturer to withdraw from the Korean Confederation of Trade Unions. It also claimed that it would establish an advanced labor-management relation by the end of 2009 by eradicating all irrational systems, declaring peaceful labor-management relationships and realizing zero conflict.
The value of SYMC, even with the effect of the long-time strike, was evaluated higher when it continues operation than when it terminates (at 357.2 billion won). The company's revival plan is set at minimizing the loss by all parties involved in accordance with the company's reimbursement abilities and is expected to gain approval.
Based on the prospect for the revival and fundamental change of the internal management soundness, Ssangyong is geared to execute the mid-and-long-term turnaround plan.
First, SYMC will improve its overall competiveness including management efficiency and productivity to the average of automobile makers within 3 years by establishing advanced management-labor relationships and a stable production basis. The company is also committed to improve its financial soundness by cutting down on financial cost and risks.
Answering to the change of market environment, in which vehicles with high fuel economy and eco-friendliness, and compact cars are preferred, Ssangyong plans to focus its energy into developing entry-level and environmentally-friendly vehicles.
The following summarizes the direction for its future product development; 1) to make the Chairman W Korea's top luxury sedan 2) to become an automobile maker specializing in Recreational Vehicles by rearranging its product portfolio to include not only Sportn tility Vehicles bule makeCompact tility Vehicles. 3) to develop an eco-friendly and highly efficient power train 4) to develop a compact Electric Vehicle model and a Plug-in Hybrid Electric Vehicle model within 5 years.
The management at SYMC reiterated that the company would turn into the black in 3-years time if all these revival plans are executed as scheduled.
In a long run, the company will seek out for establishing a foundation for sustainable growth by sharing platforms, development of compact vehicles, local CKD business, strategic affiliation andM&A's.
"There are some initial talks on partial strategic affiliation or financial investment, but earnest talks about M&A is likely to take place only after the approval for our revival plan is finalized," said Lee Yoo Il, SYMC's receivership manager. "We will do our utmost best to be reborn as a competitive corporation by realizing our mid-and-long-term revival plan," he added.