Fired Ssangyong workers win appeal
But the automaker isn’t welcoming the workers with open arms.
The Seoul High Court yesterday ruled in favor of the workers after it overturned a ruling by a lower court that accepted Ssangyong’s reasons for cutting its workforce.
The high court acknowledged the company’s emergency situation, including a tight liquidity crunch caused by the global financial crisis of late 2008.
However, it did not accept the automaker’s claim that laying off its workers was the only option it had at the time.
The court said a corporate restructuring report by an accounting firm that was the primary basis for the layoff decision didn’t hold water.
Samjong KPMG in 2008 projected that the automaker’s debt-to-asset ratio would spike to 561.3 percent. The accounting firm proposed a corporate restructuring as the books were expected to get worse. Ssangyong was losing competitiveness, and its sales were destined to fall with no new models.
The high court maintained that, despite a constant change of upper management at the time, the company was able to maintain solid sales and competitiveness through its long-term corporate improvement campaigns. The court said that despite the global crisis, the company was able to maintain a market share exceeding 20 percent while also owning several pieces of real estate.
A union representative welcomed yesterday’s court decision.
“We respect the court ruling, and we hope this will act as a valuable touchstone for solving problems at Ssangyong Motor,” the Korean Metal Workers’ Union said in a statement released after the ruling. “We also hope that the company will do its best to end the conflict.”
Ssangyong Motor expressed shock and added that it will consider bringing the case to the Supreme Court after thoroughly reviewing yesterday’s ruling.
“[A court] told us to go ahead with corporate restructuring in 2009 and now they tell us we shouldn’t have?” asked an official at the automaker.
In 2009 the automaker laid off 2,646 employees, or 37 percent of its total workforce, after its main investor, Shanghai Automotive, pulled out at the end of 2008, leaving the local automaker in distress.
The Chinese company, which had owned a majority 51 percent stake in the Korean automaker since 2006, promised new investment that never came. The Chinese automaker is still accused of stealing technology from the Korean company.
Hit hard by the unprecedented global depression that affected sales, the Korean automaker came to a point where it had no choice but to under go court receivership in February.
Two months later, the automaker unveiled corporate restructuring and revival plans, which included the layoffs.
A month later, the union went into a strike that lasted 77 days, which included violent clashes with the authorities. The automaker was bought by the Indian company Mahindra & Mahindra in November 2010.
In the first month of last year, 455 employees on extensive leave without pay were called back to work by the automaker. Since the layoffs, 24 former employees have passed away, including some who committed suicide.
The 153 employees filed a lawsuit at the lower Seoul court in November 2010, insisting that they were wrongfully fired.
BY LEE HO-JEONG, JOO KYUNG-DON [firstname.lastname@example.org]