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[Newsmaker] Allegations fly despite Ssangyong compromise

Feb. 3, 2013 - 20:39 By Korea Herald
A compromise has been reached between the ruling Saenuri Party and main opposition Democratic United Party on the issue of a parliamentary investigation into Ssangyong Motor Co., allowing the extraordinary session of the National Assembly to convene on Monday.

Despite the tentative peace between the two main political parties, the issue continues to divide the country’s political arena.

Under Thursday’s agreement, the DUP and the Saenuri Party formed a six-member negotiation group that will operate until the end of May. The inter-party body was agreed on as a compromise for the so-called 2+3 multi-party negotiation group. The multi-party group, which was a step back from the parliamentary investigation the DUP had been calling for, would have included labor and management representatives from the carmaker suggested earlier by the DUP.
Labor activists call for a parliamentary investigation into the Ssangyong Motor incident at a press conference at the National Assembly in January. (Yonhap News)

While the DUP defended its compromise saying that opening a parliamentary investigation remained the party’s official stance, the decision sparked strong criticism from minor parties.

“The parliamentary investigation the Saenuri Party and the DUP have promised repeatedly to win over the laborers’ votes has in effect been aborted,” Rep. Sim Sang-jeung of the Progressive Justice Party said.

“The Saenuri Party, which has thrown away a promise with the society’s weak and shown disregard for human life, will have to bear responsibility. (The DUP’s actions) that pass on the responsibility and make out the Ssangyong metal workers’ union and the progressive parties to be asking too much are pathetic.”

A similar two-way attack was opened by the far-left Unified Progressive Party with its floor spokesperson Kim Jae-yeon referring to the development as revealing the deceptions of the Saenuri Party and the DUP, and that the parliamentary investigation was the only answer.

For its part, the DUP claims it has only set aside the parliamentary investigation rather than given up on the idea.

“The Ssangyong Motor parliamentary hearing is a promise made to the numerous workers who are in despair, and will not be discarded,” DUP deputy floor leader Woo Won-shik said. He said that the DUP was not giving up on the parliamentary investigation but reserving it as a “powerful weapon.” He added that the inter-party negotiation group, and the so-called 2+3 negotiation group suggested earlier by the DUP, is a means to bring Saenuri Party to the table.

“Our plan is to listen to all sides -― the government, employer, Ssangyong Motor division of the Korean Metal Workers’ Union, the company labor union -― through the inter-party negotiation group in order to look for answers.”

Although the parliamentary investigation into the carmaker has only recently become a major sticking point for the country’s politicians, the issue began to take root more than 10 years ago.

Ssangyong’s troubles began with the collapse of its parent Daewoo Group in the aftermath of the Asian financial crisis of 1997-98.

Following Daewoo Group’s fall, the carmaker underwent a five-year workout period at the end of which China’s Shanghai Automotive Industry Corp. acquired 48.9 percent of its shares to become the majority shareholder.

The carmaker operated under relatively favorable conditions in the following years until 2008 when sales dropped 29.6 percent from the previous year, resulting in an operating deficit of 227 billion won and net deficit of more than 700 billion won.

As a result, the company announced a sweeping restructuring plan in 2009 that included mass layoffs.

The plans were met with strong opposition from the labor union leading to a 77-day sit-in strike that nearly drove the company over the edge.

The layoff plans were scaled back in the labor-management negotiations, but more than 900 workers were placed on unpaid leave, opted for the early retirement plan or were laid off.

In the same year, SAIC severed ties with Ssangyong, and India’s Mahindra and Mahindra Ltd. took over the Korean carmaker in 2010.

Although plans for reinstating the 455 workers on unpaid leave were announced earlier this year, 23 people -― former Ssangyong workers and their family members -― have committed suicide or died of other causes since 2009.

While SAIC has been out of the picture for some time, allegations against the Chinese firm have continued.

The Chinese firm has been accused of investing in Ssangyong to reap quick financial gains, and to access the Korean carmaker’s technologies.

In 2009, seven Ssangyong employees were charged with handing over hybrid electric vehicle-related technologies to SAIC, and were cleared in August 2012.

A month later, however, Sim alleged that the Korean government became aware of illegal activities conducted by SAIC before the Chinese firm severed ties with Ssangyong.

Seoul and Beijing engaged in heated debate over technology theft at the carmaker, according to Sim, which led to Beijing shutting down the communication channel.

After years of unresolved labor issues, and allegations of illegal activities and speculative investment by the carmaker’s former owner, progressive political parties have called for a parliamentary investigation into the carmaker.

High-ranking officials of the ruling Saenuri Party have also expressed positive sentiments towards the idea in the run up to and after the Dec. 19 presidential election, but floor leader Lee Han-koo has since made his opposition clear.

“If I was to decide on my own, I would oppose it. (A parliamentary investigation) is not helpful for solving the problem of laid-off workers, and can make Ssangyong’s management conditions even more difficult,” Lee said in a radio interview in January.

The comments incited strong criticism from the DUP as well as the minor opposition parties with stronger left-leanings, leading to a standoff that resulted in the parliamentary schedule being delayed.

By Choi He-suk  (