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Ssangyong Motor CEO Choi Jong-sik (center) celebrates the signing of a labor agreement with KMWU’s Ssangyong chapter leader Kim Deuk-jung (left) and Ssangyong labor union leader Hong Bong-seok (right)

Six years after launching a bitter struggle to return to their jobs following mass layoffs in 2009, Ssangyong Motor employees may now have the opportunity to go back to work.

The automaker announced on Dec. 30 that its board of directors had approved a trilateral plan with the Korean Metal Workers’ Union (KMWU) Ssangyong chapter and the Ssangyong labor union that would allow people laid off or pressured to resign in the 2009 restructuring - as well as those who transferred to other jobs in related industries - to be phased back into their positions.

After the board meeting, the agreement was signed by KMWU’s Ssangyong chapter leader Kim Deuk-jung, Ssangyong labor union leader Hong Bong-seok, and Ssangyong Motor CEO Choi Jong-sik.

While the agreement’s specifics were not made public, sources within Ssangyong said the company would “work toward” rehiring 179 workers let go through restructuring or for disciplinary reasons through 2017, with plans to take on additional workers as needed at a ratio of 30% from among those laid off, 30% from among those pressured to resign (including those who transferred to other jobs), and 40% new hires.

With the automaker currently planning 40 new hires through the end of January, this would mean the returns of 12 workers who were laid off and 12 who resigned voluntarily. The 16 new hires are also set to include six workers dismissed by in-house subcontractors -- part of a plan to reinstate workers who were let go in the 2009 restructuring after working at an in-house subcontracting business for two or more years.

The latter move can be seen as reflecting a court ruling that employees working at an in-house subcontracting business for a car maker for two years or more under the automaker’s direction and oversight should be regarded as “illegal dispatch workers” and considered direct employees of the company.

The company also plans to work with the union to set up a fund of over 1.5 billion won (US$1.3 million) to support those awaiting their return, along with family members of workers who have lost their lives since the restructuring. Additionally, it agreed to drop compensation claims and provisional attachments against the Ssangyong chapter and union members if those returning to work agree to drop their current suits against the company.

The three parties reached an agreement to set up a “reinstatement review committee” to discuss issues related to the worker’s reinstatement, although the exact date by which all laid-off workers will be able to return remains unclear. The current plans calls for hiring as needed for the launch of the long-body Ssangyong Tivoli or the introduction of a continuous daytime two-shift system.

“Production needs to be stepped up if the reinstatement of laid-off workers is to go smoothly, and that will require proper investment from the Mahindra Group [of which Ssangyong is a subsidiary] for the new models that are scheduled for launch in 2017,” said Kwak Sang-shin, head of research at the Workin Institute.

Ssangyong has been enjoying strong sales for its Tivoli compact SUV, moving a total of 129,648 units this year as of November, including 88,313 in South Korea and 41,335 exports. The number is up 1.2% for the same period last year, but the company remains mired in red ink.

“For the Pyeongtaek factory to turn a profit, there would need to be production of between 150,000 and 160,000 vehicles, and it has yet to reach that level,” said Lee Hang-koo, a researcher at the Korea Institute for Industrial Economics & Trade.

“Right now, it’s holding on through the technological ability it developed in the early ’00s,” Lee observed. “There’s going to need to be major investment from the Mahindra Group before it can really boost its brand as an SUV specialist.”

Dec. 30 may have marked the end of the Ssangyong layoff victims’ battle to go back to work, but many of the questions raised for South Korean society by their six-year battle in the streets remain unanswered.

The automaker undertook massive staff cuts in 2009 after its then-majority shareholder, the Shanghai Automotive Industry Corporation, engaged in what many called technology theft. With performance declining, the company announced a restructuring plan that April in which 2,646 workers, or 37% of the entire workforce, would lose their jobs. The union responded by occupying the Pyeongtaek factory and launching a strike. The situation finally ended 77 days later when authorities were sent in to brutally crack down on the strike.

The restructuring saw 1,666 workers resign voluntarily and another 980 laid off. The union and management later negotiated to have the status of many of those laid off converted to unpaid leave or voluntary resignation, but 165 remained on paper as having been dismissed.

28 workers and their family members have lost their lives through suicide or disease since the Ssangyong restructuring, while research results testify to the mental and physical ravages of the survivors.

“What the Ssangyong situation showed is what kind of position even employees at a major company face once they find themselves out of a job overnight,” explained Korea Labor & Society Institute director Roh Kwang-pyo.

“Companies, local communities, and the state need to be working to develop a multi-level safety net for people faced with the crisis of unemployment,” Roh advised.

By Park Hyun-jung and Noh Hyun-woong, staff reporters

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