|Korea Development Bank Chairman Lee Dong-gull speaks during an online press conference at the bank's headquarters in Seoul, Tuesday. Courtesy of Korea Development Bank|
By Lee Min-hyung
SsangYong Motor should put an immediate end to the unceasing dispute between management and labor to ensure it can revive its business after painstaking restructuring efforts, Korea Development Bank (KDB) Chairman Lee Dong-gull said Tuesday.
"Any further discord between the two is intolerable," Lee told reporters during an online press conference. "The carmaker should stand on its own feet by maintaining a sincere attitude for its ongoing discussion with a potential investor."
Lee stepped up criticism of the carmaker over its deepening internal dispute at a crucial time when the company needs to focus its energy on revival. SsangYong Motor filed for court receivership recently amid snowballing debts after the subsidiary of India's Mahindra & Mahindra failed to repay loans worth 60 billion won ($54 million) last month.
"SsangYong Motor should be reminded that this is the company's last opportunity for survival," Lee said. "First and foremost, SsangYong's management and labor should extend the collective agreement to a three-year basis from the current one-year renewal."
The KDB chief said the union of the carmaker should not make any excessive self-serving demands before the firm's business is normalized and it turns into a rebound.
"We urge the two parties to drop such self-injurious behavior," Lee said.
The state-run lender also remained firm in its determination not to provide any additional financial support at all unless the carmaker shows sincerity for survival and presents specific plans for its growth after holding thorough discussions with a new investor.
Lee, however, declined to comment details over KDB's ongoing negotiations with Mahindra and other investors of SsangYong.
"We want to make it clear that a company can never survive only with the help of money," Lee said. "If SsangYong loses this last chance, it stands a very slim hope for survival. No investors will be willing to inject capital into the debt-ridden carmaker anymore if its management and labor lose this final opportunity."
Mahindra plans to sell all of its 74.7 percent stake in SsangYong Motor by the end of February after a grace period of the carmaker's court receivership ends.
Mahindra Managing Director Pawan Goenka confirmed recently that the Indian car manufacturer is in talks with a potential investor and it expects to sign a "term sheet" as early as the end of this week.
With expectations surfacing over SsangYong finding a new investor, the state-run lender has shifted its position as the expected economic impact will be felt nationwide.