Strike Ends At South Korean Auto Factory

PYEONGTAEK, South Korea (AP) -- South Korea's crisis-ridden Ssangyong Motor Co. reached an agreement Thursday with its militant labor union to end a long and increasingly violent strike by pledging to reduce layoffs, though the troubled automaker's survival remained in question.

The company's announcement of the accord ended a 77-day occupation of part of its production line by hundreds of workers let go under a plan meant help the country's fifth-largest automaker emerge from bankruptcy protection. Earlier Thursday, Ssangyong spokesman Lee Won-muk said the automaker had agreed to keep more workers under the deal.

Lee Yoo-il, a court-appointed manager for Ssangyong, vowed to quickly restore factory operations, which were paralyzed by the unrest.

"The most urgent task is to normalize (the assembly) lines by leaving behind extreme confrontation between labor and management," Lee told a news conference. The company said it would take two to three weeks to get its operations back on track.

Ssangyong's union has been on strike since mid-May to oppose a company plan that slashed jobs by 36 percent. The occupation of the Pyeongtaek factory's paint shop halted production at the maker of mostly light SUVs. Violent clashes with riot police have punctuated the more than two-month standoff.

Dozens of strikers and police were injured in clashes this week. Police dropped tear gas from helicopters at workers, who shot nuts and bolts at riot police on the ground using large sling shots. The strikers also lobbed firebombs.

Ssangyong has been in court-approved bankruptcy protection since February amid falling sales and mounting red ink. Troubles deepened with the strike and occupation.

The company's original restructuring plan called for the shedding of 2,646 workers, or 36 percent of the work force. Some 1,670 have left the company voluntarily but nearly 1,000 opposed the move.

Under Thursday's deal, the company agreed to keep as employees 48 percent of those opposed to the layoffs, up from 40 percent in an earlier company proposal, Lee said. They will be classified as on leave without pay. South Korea's Yonhap news agency said it would be "long-term."

The union, which had insisted on no layoffs, proposed new talks Thursday morning, reportedly saying it had made a "fundamental change" in its position. That followed two days of growing pressure on the strikers by police commandos, who took increasingly stronger measures to end the unrest.

Investors cheered the developments, sending Ssangyong's shares up by the stock market's daily 15 percent limit. They closed Thursday at 2,020 won ($1.65).

Thursday's negotiations came after helicopter-borne police commandos battled with strikers and overran most of the chaotic factory in a series of raids Tuesday and Wednesday to try to crush the strike.

The dramatic assaults and a police ultimatum giving protesters until Thursday to give up apparently increased pressure on the about 500 workers who were holed up in the paint shop at the factory in Pyeongtaek, some 45 miles (70 kilometers) south of Seoul.

Flammable materials inside had raised fears of an inferno if there was a full-blown police assault inside the facility. The main battles occurred on the roofs of plant buildings.

The unrest has cost Ssangyong over 300 billion won ($245 million) in lost production, according to the company.

Ssangyong must submit its survival plan to the court overseeing its restructuring by Sept. 15.

An association of auto parts suppliers comprising 600 companies to which Ssangyong owes about 300 billion won filed a court petition Wednesday calling for the carmaker's liquidation.

Ssangyong, which mostly manufactures light SUVs and a luxury sedan, is majority-owned by Shanghai Automotive Industry Corp., one of China's largest vehicle manufacturers, though it lost management control amid the bankruptcy protection process.

Associated Press writers Jae-soon Chang and Kwang-tae Kim in Seoul contributed to this report.

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