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South Korean firm Ssangyong Motor, in which Shanghai Automotive Industry Corp (SAIC) holds a controlling stake, is still in talks with unionized workers as they resumed strike action yesterday after rejecting a proposal to end the stoppage, according to an SAIC official.

 

The union resumed a six-week strike after voting against a tentative agreement with management yesterday.

 

The dispute began on July 14, with indefinite strike action taken on August 16.

 

Ssangyong Motor proposed a four-year investment plan to develop new models and engines in an effort to end the strike last week.

 

"Ssangyong Motor management are still trying to reach an agreement with union representatives to roll out any opportunity to resume production at the plant," said the official, who preferred not to be identified.

 

Sources close to the company said the strike had so far cost Ssangyong Motor at least 36,000 vehicles as it entered its sixth week. Production at Ssangyong Motor's assembly plant in the port city of Pyeongtaek, about 72 kilometres south of Seoul, came to a halt on August 16.

 

The spokeswoman said no additional proposals had been made since the agreement was rejected yesterday.

 

"The only information we can disclose now is that we are trying to help the management and union at Ssangyong Motor to reach an agreement," she said.

 

Ssangyong Motor held talks with union officials last week proposing to spend 1.2 trillion won (US$1.25 billion) by 2009 if unionized workers ended the strike, spokesman Kim Bum-Suk was reported as saying.

 

The company also offered to halt its job-cutting program to shed 1,000 jobs at South Korea's fourth-largest carmaker.

 

The company's management and union officials reached a provisional agreement after several rounds of talks last week.

 

But the proposal was voted down on August 25. About 63 percent of the nearly 5,000 union members who voted said no to the agreement.

 

Ssangyong Motor workers have accused the company of leaking technology to SAIC, one of China's largest automakers, which took over Ssangyong in 2004.

 

Around 3,000 union members at Ssangyong Motor joined the walkout yesterday, blocking other employees from entering the plant and protesting against the company's plan to cut jobs and other corporate restructure moves, South Korean media reported yesterday.

 

The company's union officials said on its website that the strike would continue.

 

Union official Lee Kyu-baek said the union was told by management it would not negotiate further.

 

Union members proposed Ssangyong Motor abandon technology-sharing with SAIC. But that proposal was not included in the provisional agreement reached by union officials and company management.

 

SAIC took control of Ssangyong Motor in late 2004 in a bid to use the South Korean firm's technology and experience manufacturing small sport utility vehicles to sharpen its design capabilities and ability to make vehicles in China.

 

Ssangyong Motor, with an annual production capacity of about 220,000 vehicles, produces sport utility vehicles like the Rexton and Actyon.

 

(China Daily August 29, 2006)