Ssangyong Motor filed for bankruptcy protection on last friday, becoming the first major casualty among Asian carmakers as demand plunged and credit dried up in the global economic crisis.
Ssangyong, the smallest of the five automakers in South Korea, had been struggling to obtain cash after being hit hard by slumping sales. In the past month, it was pushed to the brink of bankruptcy and could not even pay its employees while governments and creditor banks in China and South Korea were locked in a dispute about who should bail the company out. Ssangyong is owned 51 percent by SAIC Motor of China but runs its factories in South Korea, employing 7,100 workers.
The automaker needed 600 billion won, or $451 million, in new financing to stay in business, according to Korea Development Bank, its biggest creditor.