SsangYong Motor in receivership ramps up cost-cutting drive

SsangYong Motor Co. is seeking to cut some 10 executive jobs as part of its restructuring efforts after being put under court receivership, an industry source said Sunday.

SsangYong Motor has been in the debt-rescheduling process since April 15 as its Indian parent Mahindra & Mahindra Ltd. has failed to attract an investor amid the prolonged COVID-19 pandemic and worsening financial status.

According to the source, SsangYong Motor has been considering cutting about 30 percent of its 33 executive positions.

However, the move is expected to face backlash from the automaker's labor union, which has expressed concerns that such restructuring could lead to another cut in jobs.

It is the second time for SsangYong Motor to be under court receivership after undergoing the same process a decade ago.

Court receivership is one step short of bankruptcy in South Korea's legal system. In receivership, the court will decide whether and how to revive the company.

SsangYong Motor filed for court receivership late last year after failing to obtain approval for the rollover of 165 billion won ($148 million) worth of loans from creditors.

Under court receivership, SsangYong Motor's survival depends on whether there will be a new investor to acquire a streamlined SsangYong Motor after debt settlement and other restructuring efforts. (Yonhap)