As if things weren’t already difficult for the already embattled Ssangyong brand, they were dealt another blow. Their factory halted operations last February 16. Even worse is the fact that this latest shutdown is already the third one this month.
Factory operations were stopped last February 3 to 5 and February 8 to 10, as well. The main reason for the factory shutdown was the disruption in the supply of parts vital to production. It comes after negotiations failed between Ssangyong and suppliers. The failed negotiations led to Ssangyong having no choice but to shut down the factory until February 22.
According to reports, at the end of last year, the Ssangyong plant was also shut down because they didn’t receive parts from five suppliers. These include Hyundai Mobis, S&T Heavy Industries, LG Hausys, Continental Automotive, and Borg Warner Ochang.
These latest setbacks are the last thing the Ssangyong brand needs. The automaker is just a few days away from the February 28 deadline set by the South Korean courts for them to repay their KRW 301 billion (Approx. Php 13.3 billion).
Add to the fact that there are other loans they need to settle as well. They also need to pay JPMorgan Chase (KRW 60 billion), BNP Paribas (KRW 10 billion), Bank of America and BofA Securities (KRW 30 billion), and finally a (KRW 90 billion) loan to the Korean Development Bank.
With Ssangyong only having a few weeks to find a way to manage itself, the company needs a cash injection or find a new buyer to help them out of their grave predicament. HAAH Automotive Holdings is Ssangyong's best bet. The American company is backed by Chery Motors, which plans to sell cars in North America soon. Reports say that HAAH offered KRW 300 billion to take Ssangyong off Mahindra's hands. If it's true, Ssangyong's future will be less uncertain.