Controversy over the’double standards’ supported by the Bank of Korea…800 billion won for GM that closed the factory, and 160 billion won for Ssangyong Motors is’impossible’

Input 2020.12.22 15:35

Ssangyong Motor (003620)In the process of filing for court management with the court, the double standard of support from Korea Development Bank, the main creditor bank, rose on the cutting board. In accordance with the restructuring policy of General Motors, the headquarters of the United States, GM Korea, which closed its Gunsan plant, had invested enormous amounts of money to maintain employment. Is intellectual.

◇Insufficient labor-management efforts to buy Ssangyong Motors after selling idle factories and returning annual salaries

On the 21st, Ssangyong Motor was unable to pay off loans borrowed from financial institutions due to a deficit for 15 consecutive quarters and applied for corporate rehabilitation procedures. The amount of delinquent repayment of the principal and interest of JPMorgan, BNP Paribas, and Bank of America Merrill Lynch announced by Ssangyong Motor is about 60 billion won, and the amount borrowed from domestic banks is about 100 billion won.

Earlier, Ssangyong Motors requested funding from the government in April, but the government indicated that there was no plan to invest funds such as the GM Korea incident, and there will be no future. Both GM Korea and Ssangyong Motor posted losses for several consecutive quarters, and the liquidity crisis is the same, but it is difficult for Ssangyong Motor to provide funds to GM Korea. The Korea Development Bank also drew a line on the possibility of applying in June, targeting both the labor and management of Ssangyong Motors, saying “the labor and management’s (autonomous) efforts are not enough.”

However, inside and outside the industry, it is evaluated that Ssangyong Motor’s self-reliance efforts were at a considerable level. Ssangyong Motor, which recorded the worst deficit last year, sold non-core assets excluding factories in Pyeongtaek and Changwon, and returned executives’ salaries. The union also actively cooperated with the company to overcome the crisis, such as suspending rewards and reducing welfare. Ssangyong Motor’s union, which has set a record of concluding a dispute-free wage negotiations for 10 consecutive years, succeeded in negotiations as the first among domestic automakers in a difficult management situation due to Corona 19 this year.

Major shareholder Mahindra Group also rolled up their arms to save Ssangyong Motor. At the end of last year, Mahindra directly transfused up to 230 billion won, and arranged cooperation with a Chinese automobile company and Ford Motor Company of the United States to actively help with electric vehicle (EV) technology alliances and expansion of overseas sales. Earlier this year, President Pawan Kuma Goenka Mahindra, who visited Korea, requested support from the government and the Korea Bank, saying that Ssangyong would turn a profit of 500 billion won by 2022. Mahindra Group will pay 230 billion won and Ssangyong Motor will raise 100 billion won by itself, so the government and the Bank of Korea asked for the remaining 170 billion won.

◇Korea GM is supported and Ssangyong is difficult.

However, the Korea Development Bank delayed responding to Mahindra’s request, and Mahindra eventually reduced the amount of support for Ssangyong Motors to 40 billion won in April. It also announced that it will lower its position as a major shareholder when a new acquirer comes out. When Ssangyong Motor, which has to directly raise the necessary funds after Mahindra leaves, requested emergency assistance from KDB, KDB said, “Because it is a creditor rather than a shareholder, it is difficult to rush funds and we are watching the situation. On the other hand, the KDB invested 1.7 trillion won in funding for Asiana, which had the same debt relationship at the same time, and promised additional support.

The Bank of Korea drew a line saying that Ssangyong Motor’s stabilization fund, which is worth 40 trillion won, announced in June, is not applicable. This is because the company, which had been difficult to manage from before Corona 19, was excluded from support, and the majority shareholders lacked the will and responsibility to save the company, and the company’s sustainability after funding was uncertain.

With this, it is pointed out that Sangeun’s attitude toward Ssangyong Motor is different from that of Korea GM just two years ago. In February 2018, GM had a strong storm, such as shutting down its Gunsan plant in February 2018, but the government decided to invest $750 million (about 800 billion won) through the Korea Development Bank, the second largest shareholder of GM Korea. The GM crisis is over. At that time, the government and the Bank of Korea praised themselves that they were able to keep 156,000 jobs for more than 10 years through negotiations for the normalization of GM Korea.

Some point out that if the Korea Development Bank is willing to save Ssangyong Motor, it should be supported by participating as a shareholder. An industry official pointed out that “Compared to the situation in which the KDB urgently invested 800 billion won at the time of GM withdrawal in 2018, shareholder participation in Ssangyong Motors with no possibility of withdrawal is much more convincing.”

Moreover, even after KDB’s large-scale investment, GM Korea remains a marginal company that cannot even pay interest through operating profits for the third consecutive year. In addition, the GM headquarters is not implementing the investment plan promised at the time the KDB decided to invest funds. GM has been in Korea for more than 10 years and has promised a new car/partial change model for 15 new cars within 5 years, but the news of the new car is slow and it is mentioning the withdrawal of Korea if there is a conflict with the union. Recently, controversy over the closure of new cars has risen as new cars have not been allocated to the Bupyeong 2 plant.

The Korea Development Bank is in a position that it will decide whether or not to extend the maturity of 90 billion won after observing the extension of foreign financial institutions. This is why there are criticisms that the Korea Development Bank, which is the main creditor bank, is backed by others. Another industry insider said, “If you include 5,000 employees of Ssangyong Motor and even the first and second-tier suppliers, the number of employees directly or indirectly linked to Ssangyong Motor will reach tens of thousands.” “It’s ironic that you have a completely different attitude from that.”