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Discussion Starter · #1 ·
http://www.chinadaily.com.cn/bizchina/2006-08/29/content_676588.htm
SAIC's take over of Ssangyong is turning into a financial disaster, as the company that was generating a $300 million/year in annual profit is now losing $100 million a year just 1.5 year after Chinese take over, with its local sales off by 50%.

Can't say this won't be repeated with Nanjing's MG and Shanghai's Rover operations.
 

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Real_I_Hate_China said:
Can't say this won't be repeated with Nanjing's MG and Shanghai's Rover operations.
But its not the same situation!

Strikes are normal in Korea, but very unusual in China.
 

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hmmm.

Windy said:
But its not the same situation!

Strikes are normal in Korea, but very unusual in China.
I think the sales figure came out before the strike..... According to the labor union, the strike started coz shanghai motor did not do anything about the investment of restructuring the company rather than attempting to bring their technology. I don't know who is right or wrong.

But the labor union in Korea certainly has a big power . I think they were same as china until 1980. They did not have much power and worked under the hard working condition without complaining. And from the begining of 1980s, the labor strike spead all over south korea. It improved their working conditions and pay but many foreign companies left Korea. At the begining, they had the support from the public, but not any more. The good example will be the hyundai case, according to the media, their average salary is said about 70,000 or 80,000 USD per year, not sure which one is correct. And certainly, this amount of money is not small at all in Korea. Despite of this,they did this year again. In fact, they have had the strike for 10 years and got the pay rise of 9 to 10% every year. And now what I can see is that there are the rapid increasing of anti-Hyundai in Korea.

However, this is not applied to all manufactures in korea. Not certainly to the SSangyong's employee who worry about the job security. Acutally, Ssangyong was recovering themselves as the hater shown in numbers. But they got worse. Why? They're still selling the old models. No money for the new car development. In fact, what they expect from the shanghai motors were the money to invest for the R&D, developing new cars and expending the oversea sales network. If you look at the motor industies in Korea, Daewoo can get those from GM. Hyudnai? They're doing developing quite fast with the full range of new designed cars. This mean SSangyong has to fight with other competitors with the current model, which had a small share even when it was a new car and Shanghai motor certainly not showing any sign of injecting the cash for it regardless what they said when they took the company. They are more interest in moving the some of current production line to China. Hyundai changed whole range of its production and it's expected to bring 2,3 new cars in next 1,2 years. But Ssangyong? I haven't heard anything about bring the new car. I think they just want to have a hope for better future and certainly they can't have it by just selling the current model or face lifted one....

Well, this is what I felt after reading a couple of articles about the strike.
And you said it's unusal to china to have a strike... But I wonder how longer the labor in china will keep their mouth shut? As the life standard is being increased repaidly in china, it seems like a matter of time to me. Chinese aren't stupid and I also read the new about the number of strike in china is increasing quite fast. And I'm quite curious to see how the chinese automakers will sovle this kind of issues and still keeping the cost at low....
 

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Real_I_Hate_China said:
They lost $100 million BEFORE strike.

It was SAIC's calls for a restructuring and layoffs in response to that $100 million loss that triggered the strike.
Yep but you forgot to mention that SsangYong is about to start making a profit again thanks to the restructuring, new products and layoffs...
 

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Discussion Starter · #7 ·
Yep but you forgot to mention that SsangYong is about to start making a profit again thanks to the restructuring, new products and layoffs...
Turning around Ssangyong won't be easy. The reason company was sold to SAIC even though it was profitable was because SAIC promised a $1.2 billion investment necessary to bring out a trio of next generation chassises for Ssangyong to stay competitive in today's cut-throat market. Of course SAIC forgot about its promise soon after the purchase and has not made any new investments, instead focusing on moving all of Ssangyong's design files to China. No new investment means no new product, which leads to further declining sales until the inevitable bankruptcy. Many suspect Ssangyong's bankruptcy is what SAIC is really after anyway, as SAIC would be able to pick up Ssangyong's production line for less than $50 million at the court auction and move them to China.

Ssangyong's problem is a problem shared by all Chinese auto manufacturers; the lack of billions needed to invest into new product to stay competitive. It turned out that SAIC wasn't so cash-rich as believed to be.
 

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Real_I_Hate_China said:
Many suspect Ssangyong's bankruptcy is what SAIC is really after anyway, as SAIC would be able to pick up Ssangyong's production line for less than $50 million at the court auction and move them to China.
The last time they tried that they got beaten by Nanjing in the final bid.
 

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This is an international forum and anybody who will try their hand at English is very welcome, it isn't supposed to be a language competition.

Having said that hater mate, I'd just like to point out that the plural of chassis is chassis and not chassises. I only think it's important because you are the chassis expert.

To the topic, do you not think the fact that Ssangyong mainly makes SUV's and that the fuel price everywhere is rising might have something to do with it?
 

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Discussion Starter · #10 ·
do you not think the fact that Ssangyong mainly makes SUV's and that the fuel price everywhere is rising might have something to do with it?
The other company's SUV sales aren't hit that much. It is just Ssangyong whose sales are halved.
 
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