Home » Business » Intensifying management crisis of three small automakers… Exit strategy’contemplating’

Intensifying management crisis of three small automakers… Exit strategy’contemplating’

GM Korea seeks to prepare measures to disrupt supply and demand for semiconductor components
Renault Samsung Motors, warning letter to headquarters… Point out the competitiveness of the Busan factory
Ssangyong Motor enters the P plan… HAAH automotive negotiation difficulties

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View of GM Korea Bupyeong Plant. (Photo = GM Korea)


The management crisis of GM Korea, Renault Samsung Motors, and Ssangyong Motors is intensifying. Accordingly, each company is seeking an exit strategy for the crisis. However, it is expected that it will be difficult to resolve the management crisis in the short term.

According to related industries on the 14th, three small domestic automakers are experiencing internal and external negatives caused by the aftermath of Corona 19.

GM Korea faced a shortage of global automotive semiconductor supply and demand from the beginning of this year following a partial strike by the labor union last year, resulting in production disruption.

Accordingly, GM Korea cut the production at its Bupyeong 2 plant in half. GM Korea is expected to keep an eye on the situation while maintaining production cuts for the time being.

Bupyeong Plant 2 is producing Chevrolet Malibu and Trax for export to North America. The monthly output is about 10,000 units. This production cut is expected to produce about 5,000 units a month.

GM Korea is planning to work closely with parts makers to find ways to supply and demand semiconductors.

However, as the supply and demand disruption for vehicle semiconductors is expected to continue until the third quarter of this year, the situation is not expected to ease.

Renault Samsung Motors is operating the’Survival Plan’. Through this, Renault Samsung Motors cut 40% of its executives and 20% of the remaining executives’ wages, and started retirement for all employees.

In this situation, the union passed a strike on the 2nd in a vote for and against the industrial action. Renault Samsung Motors’ labor and management was the only domestic automaker that could not conclude a wage and collective bargaining agreement last year.

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Renault Samsung Motors' Busan factory.  (Photo = Renault Samsung Motors)
Renault Samsung Motors’ Busan factory. (Photo = Renault Samsung Motors)

At the headquarters of the Renault Group, a warning letter was raised.

On the 9th, vice-chairman Jose Vicente de Los Mozos, general manager of manufacturing and supply of Renault Group, pointed out the competitiveness of the Busan plant and set three goals: △best quality △reduce production cost △compliance with production delivery Ordered to achieve.

Along with this, Vice Chairman Ross Mojos warned, “If this promise that the Busan plant must fulfill, we will find new ways to do it.”

The production competitiveness (QCTP) of Renault Samsung Motors’ Busan plant was ranked 10th out of 19 factories in Renault Group as of last year, down 5 places from the 5th place last year. The factory manufacturing cost score was only 17th as of last year.

Ssangyong Motor plans to submit a pre-rehabilitation plan to the court with the consent of the creditors by the end of this month and enter the’Pre-packaged Plan’, a short-term court official. It is known that the rehabilitation plan will be submitted internally to the court by the 23rd.

Earlier, on December 21 of last year, Ssangyong Motors applied for corporate rehabilitation. Along with this, it applied for an autonomous restructuring assistance (ARS) program and the court accepted it. Accordingly, Ssangyong Motor had three months to complete negotiations with new investors.

However, HAAH Automotive was unable to finalize the sale of Ssangyong Motors as they left Korea without making a final decision on the P plan.

An official from Ssangyong Motor said, “We are currently in discussions with the Mahindra Group and potential investors on the P plan related procedures for smooth P plan promotion. ”

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View of Ssangyong Motor's Pyeongtaek headquarters.  (Photo = Ssangyong Motors)
View of Ssangyong Motor’s Pyeongtaek headquarters. (Photo = Ssangyong Motors)

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