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05-25-2011 18:26

SsangYong back in action

The Korando C sports utility vehicle Automaker achieves remarkable growth in productivity By Kim Da-ye PYEONGTAEK, Gyeonggi Province Lets make a comeback with the success of the flawless Korando C, The resurrection of the Korando C is in our hands, Dont accept, make or ship defects, read banners on the wall of SsangYong Motors Pyeongtaek plant one Tuesday afternoon. The first assembly line of the plant that manufactures SsangYongs flagship sports utility vehicle (SUV) the Korando C is operating at full speed, and one or two workers stand by each vehicle, inspecting or connecting parts and components. A bell rang, informing of the afternoon break. Most workers didnt leave the assembly line and continued to focus on their jobs. Back in 2008, they used to take a break five or ten minutes early. Now, they just want to get more work done, Kim Bok-soo, the team leader of the assembly line, proudly says.

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They have no time to waste because on that Tuesday afternoon, there was still a backlog of some 5,000 orders for the Korando C. The plant is working at its full capacity of 24 vehicles per hour, and Kim wishes he could work longer hours to assemble more. Employees now work overtime on Tuesdays, Thursdays and Saturdays, but this will soon increase to five days a week with the expansion of the paint shop in July or August. The supply of materials hasnt caught up with our productivity yet. I wish the facilities expansion would be completed sooner, so that I can do more overtime, Lee Gye-ju, foreman of the assembly line, said with a smile. Ssangyong Motor, Koreas fourth largest automaker, is making a comeback. That isnt evident only in Lee and Kims words, but also in the numbers. The company sold more than 10,000 vehicles in March and April. Last month, it sold 10,343 3,980 here and 6,363 in overseas markets representing a 47 percent increase from the same month last year. Exports exceeded 6,000 per month for the first time since April 2007 before SsangYong went into court receivership. Orders for the Korando C, in particular, reached 2,627 abroad in April, accounting for nearly 40 percent of all overseas shipments. The figure is also up nearly 50 percent from the 1,693 sold abroad in March. The vehicles popularity in overseas markets is evident on the assembly line. The grill and wheels of most Korando Cs come with the wing-like logo used for foreign markets instead of the domestic one that looks like a slanted number eight. All vehicles have a newspaper-size sheet attached on the hood that tells its specifications as well as the destination which ranges from Australia and Belgium to Russia and Poland. The SUVs for Australia have the drivers seat on the right. SsangYong believes its revival depends on the growth in sales which can only be supported by new and attractive products. The Korando C is a special vehicle for the automaker. It is, in general, extremely difficult for a company under court receivership to come up with a new product that

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costs hundreds of billions of won for research and development, marketing and sales. SsangYong didnt have a new vehicle model for more than five years, and its employees returned one third of their annual bonuses to develop the Korando C. The new version of SsangYongs flagship SUV shows improvements in the design and achieves a solid fuel efficiency of 15 kilometers per liter for the diesel-powered, two-wheel-drive model. In order to meet Europes environmental standards, SsangYong adopted a monocoque design instead of a heavy internal frame. After the prolonged break, the firm hopes the Korando C will help reintroduce the brand into European markets. When asked what changed the most after the company was normalized, Lee responded, I now have more confidence in making cars. I am now certain that consumers wont regret buying our cars and will be fully satisfied.

About a month after launching the SUV in February, SsangYong unveiled the third generation New Chairman H at the 2011 Seoul Motor Show. After a facelift, the classic model comes with a five-speed automatic transmission developed by Mercedes Benz, SsangYongs own engine pumps out 222 horsepower, 31 kilograms per meter of torque and numerous convenient features, including a button key. The automaker is currently developing a facelift model of the Actyon Sports, a pickup truck, under the project name SUT1, while a brand new model is planned for 2013. The new car is known to be based on the Kyron SUV, but a SsangYong official said nothing will be decided until the automaker and Mahindra & Mahindra, its major shareholder from India, complete their post-merger integration. Although details of the strategy for the integration have yet to be revealed, both SsangYong and Mahindra are determined to make eco-friendly vehicles.

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At the Seoul Motor Show, SsangYong showed its commitment by presenting KEV2, a concept electric vehicle running on a 120 kilowatt motor and a high-voltage lithiumpolymer battery. It also hosted a test drive session for the electric version of the Korando C. SsangYong CEO Lee Yoo-il said that the automaker once considered developing a diesel hybrid but is now reviewing with Mahindra the possibility of producing electric vehicles. A test model could come out in two years, Lee said in March. Mahindra said March 15 after finalizing the acquisition of a majority stake in SsangYong and paying off the 522 billion won debt that it would invest up to 240 billion won this year for product development and brand improvement. The automaker gives credit to the increase in productivity through restructuring. SsangYong trimmed down its workforce of 7,179 to 4,812, including 456 on leave without pay during the two-year restructuring process, but significantly boosted the rate of operation. Between January and March this year, SsangYong made 25,517 vehicles with 3,204 technical employees, meaning one person made 9.3 vehicles. In stark contrast, 5,068 technical workers produced 8,266 vehicles between February and April 2009, according to SsangYongs data. The automaker says that when an assembly line is assigned for a new vehicle, it takes some time for it to stabilize and reach optimization for the model. That used to take a month but is now done in a matter of a week. Furthermore, when employees worked overtime, the plant operated at only 60 percent of its full capacity. The rate has now been raised to 99 percent. Kim says his assembly line achieved an operating rate of at 100 percent on six days last week, meaning one complete vehicle was born every 150 seconds. Operating at full capacity means there were no defects in the equipment and workers made no errors. This requires four Ms men, machines, materials and method, Kim said. And behind the improved productivity are, of course, SsangYongs workers who set up an independent labor union after the infamous 77-day strike in 2009. Before and after Shanghai Automotive Industry corporation (SAIC) bought a majority stake in SsangYong in 2004, the company reported huge losses and, with slashed orders, some employees were left idle.

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The company was placed under court receivership in early 2009, and layoffs resulting from the ensuing restructuring pushed workers to go on a massive strike. The soured relationship between management and the workers then seemed unrecoverable, but it did mend. Workers didnt gain anything from the labor movement. What they learned was that they could lose everything. For SsangYong to survive, they shouldnt rely on the government, the bank or any other external factors, but shoulder the burden on their own, CEO Lee Yoo-il recently said in a conference. Now, management and the labor union have become one, focusing only on how to revive the company, he added. And the CEOs words echoed in the air of the first assembly line at the Pyeongtaek plant. The inside was spotless with recycling bins and mops neatly arranged in corners, and each piece of heavy machinery carried a My Machine Card that had a photo of the employee that operates it and their name. Each worker is taking extra care of his or her machinery in this Love My Machine campaign, and the facility failure rate has dropped from four percent to 0.2 percent, SsangYong said. The campaign is part of the SsangYong Production System (SPS) developed three years ago as part of the firms determination to revive itself. After the company was normalized, I couldnt see anyone taking a rest during working hours and even during break time, they discuss a variety of issues such as cost reduction, says Yoon, a technical employee who did not want his first name published. In addition, in terms of the labor-management relations, SsangYong is now setting a good example. In May, SsangYong became this years first domestic automaker to finalize its annual salary negotiation. On May 18, management and the labor union agreed on a 71,000-won increase in the basic salary and improved welfare. Nearly 64 percent of the labor union members agreed on the terms in a vote that recorded a 95 percent turnout. Team leader Kim speaks of his dream, Our assembly line tries to be No. 1 in four areas cleanliness, safety, quality and productivity. When we become No. 1 in

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Korea, wouldnt we be able to become the best in the world? Foreman Lees hope is somewhat more down to earth, yet reflects that of other employees. I hope the company will improve in the long run, not just the short term, he said. In 2009, our living conditions deteriorated. I want the company to do well, which will mean that my family can have a better future.

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