SAIC denies Ssangyong theft claims
Late yesterday, SAIC issued a strong denial of Ssangyong claims of theft by SAIC, SAIC claim that it was a technology transfer, but Ssangyong obviously claims otherwise.
SHANGHAI, Jan. 15 (Xinhua) — The Shanghai Automotive Industry Corp. (SAIC) Thursday dismissed allegations that it had stolen technology from its Republic of Korea (ROK) auto-making affiliate as “totally baseless”, claiming the “technology exchange” was a normal commercial activity.
”The accusation is totally baseless,” said Zhu Xiangjun, SAIC spokesman. “The technology exchange between SAIC and the ROK’s Ssangyong Motor Company after the merger is normal.”
SAIC, China’s biggest car maker, holds 51 percent of Ssangyong.
Zhu said all the technology transfers between the two companies were based on contracts, which accorded with international practice.
Ssangyong labor union leaders held a rally in front of the Chinese Embassy in Seoul Tuesday. The protestors, chanting slogans and waving placards, accused SAIC of stealing technology from the company and violating cooperation promises.
”SAIC and Ssangyong focus on different technologies,” said Zhu. “The Ssangyong labor union accused us of stealing their technology on the hybrid diesel engine, but SAIC’s research field is a hybrid gasoline engine.
”Meanwhile, Ssangyong’s technology is at the concept phase while the hybrid power sedan developed by SAIC will be mass produced in one year,” he added.
Ssangyong labor union leaders also said SAIC had failed to cash its promise to invest 1 billion U.S. dollars in Ssangyong .
”We have never made such a promise,” Zhu said. “What we said is we will raise the capital by different means in accordance with international practice.”
Zhu said the promise was made by another bidder who competed against SAIC to acquire Ssangyong in 2004 and was “mistakenly grafted on to SAIC”.
Ssangyong has fallen into a financial crisis with slow auto sales and a lack of operating funds. SAIC offered a restructuring proposal that included jobs, cost and benefit cuts. But the labor union rejected the proposal and asked for capital injections from its parent company.
Ssangyong filed for bankruptcy protection on Jan. 9, but the ROK court failed to produce a turnaround plan. SAIC is awaiting the court ruling on whether to accept the applications or to proceed with insolvency procedures.
SAIC will lose control of the auto maker under court receivership.
”Under the pressure of financial crisis, we believe that Ssangyong has no other alternative, but to apply for the bankruptcy protection,” Zhu said.
What CCT would be interested to know is, what technology was transferred to SAIC from Ssangyong, other than the upcoming Roewe SUV (which is based on a Ssangyong Kyron), did SAIC get anything else, a Chairman limo perhaps?
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> claiming the “technology exchange” was a normal commercial activity.
Well, not the supplier drawings and almost not the government issued hybrid tech, which will launch as Hyundai Blue-Drive this year and GM Vice President Bob Lutz praised as critical in realizing Chevrolet Volt(Volt uses Korean government developed proprietary battery system).
> What CCT would be interested to know is, what technology was transferred to SAIC from Ssangyong,
- Kyron
- Rexton
- Chairman W
- C200 Unibody SUV
- W161 Roewe 350/MG5
- Inline-6 gasoline engine plant(The whole plant was moved to China)
- Hybrid tech(Government issued and were not to be transferred out of Korea without a government permission) – Illegal and under government investigation.
- Supplier parts drawings – Illegal and under government investigation
That’s quite a list, but they did pay for it!
Citations?
Still waiting on those citations.
> That’s quite a list, but they did pay for it!
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Yea. but SAIC paid “Chinese price” for these. $20 million for the worldwide rights to a V8 luxury limo that cost $300 million to develop? And SAIC refused to pay the actual payment even after the contract was signed?
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And the list contains illegal technology thefts in case you haven’t looked closer.
Citations? You have lots of ‘information’ but not many references?
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If you could back up anything you say with evidence, it would make your case a lot more compelling.
We have to be careful with what IHC/ILC said, he was also the one that accused Chery Cowin sitting on a pirated SEAT Toledo chassis which then later proved to be licensed chassis from SEAT Toledo. He’s just another Korean and acting more or less like his activist fellows in Korea.
lol I miss these pointless debates since CCF
Good Luck Ash XD !
Btw Zhu Xiangjun is a woman not a man.
One more deviant act from the Chinese car manufacturers…
http://intelcar-en.blogspot.com/2009/01/transparency-of-chinese-manufacturers.html
How is this deviant? Perhaps they only tested English language websites.
Indeed… it was impossible to look at other websites… because they were all written in Chinese!!! So, you were talking about transparency…
First of all, Chinese car makers are not as international and huge as let’s say European or American, secondly the main market of Chinese cars is still China. Thirdly those information do exist but in Chinese.
And what is that Intelcar ? Is it a new automobile monitor agency or what ? How come I never heard of them.
When people make comparison between Chinese and Western auto industries, what they tend to overlook is the fact that Western one has been there for centuries. It is like comparing a toddler to an adult.
mememe is right
Interesting. Cerberus just sold 35% of Chrysler to Fiat for $0, in exchange for access to Fiat models and technology(Fiat, Alfa Romeo, Maserati, etc)
So Chrysler rejected SAIC’s multi-billion offer and went with Fiat’s offer of technology assistance.
I’m interested in knowing where you find these rumors about SAIC’s “multi-billion offer” when the closest news is speculation of potential suitors from Asia and Europe that have also listed TATA and Renault/Nissan as possible acquirers. And when it comes to these acquisitions, it would be silly to think there is anything but the cash paid as consideration. Chrysler LLP is a private equity holding, the only thing that matters to their owners is total return so they can get their carried interest. Either Fiat was the only suitor, or they were willing to pay more than the others. Nothing to do with technology, competence, or any other concerns of long term viability. In fact, I would wager than Fiat is interested in access to Chrysler’s infrastructure in the U.S., knowing the American consumer’s preference for foreign automobiles, with little intention of minimal technology transfer. With such a small minority equity stake in Chrysler, there is no incentive or obligation for them to support Chrysler in the long run. I would also highly doubt there are any clauses that would stipulate mandatory R&D transfers as well, as it’s probably hard enough to get ANY sort of financial assistance or equity injections with Chrysler in such a sordid state, not to mention requiring any sweeteners on top!
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Also, it’s unlikely Chinese conglomerates dare acquire outside China with the implied government warnings ever since the Blackstone fiasco.
Dont listen to I_Hate_China, he talks mostly crap, never EVER substantiates any of his claims with anything worthwhile, and has a permenent stiffy for all things Korean.
> I’m interested in knowing where you find these rumors about SAIC’s “multi-billion offer”
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An unnamed Ssangyong executive. It was a Ssangyong insider that confirmed that SAIC was not injecting any cash into Ssangyong because SAIC was making a bid on Chrysler.
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> Either Fiat was the only suitor, or they were willing to pay more than the others.
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Since Fiat paid $0 for 35% of Chrysler, whatever bid SAIC put on table was better than Fiat’s in terms of money. However, Chrysler decided to take Fiat’s offer of an access to all of Fiat models(Except for Ferrari) and factory retooling to build them over SAIC’s offer of cash, probably at least $1 billion.
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Why Chrysler made that decision is based on “viability”. With Fiat deal, they can now switch over to fuel-efficient European models in a year, but SAIC’s money doesn’t improve Chrysler’s chance of a long-term survival.
thanks for changing your name to something a little more polite, IHC!
It was an error as I was posting at two forums. I will stick with I_Love_China.
Because they paid $0 cash does not mean they are offering nothing of value! They are paying to re-tool a (some of) Chrysler’s plant(s), not a nominal amount. One could only imagine how much it costs to pay for all that equipment. According to various reports quoting Ford, the cost of re-tooling their plants to build Ford Focus instead of their SUVs was $250MM per plant. And you are talking about switching from building Chrysler vehicles to Fiat; it’s possible the tooling they use is completely different using completely different processes. Again, private equity is only concerned with profits, not any sense of national responsibility.
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Any quotes from this Ssangyong exec? With their distaste for SAIC, they must’ve said it to media. Probably not afraid of losing his job either, considering the dire straits the company is already in. Or he could’ve seen it from the POV that without SAIC’s bailout, they wouldn’t even have survived to this day.
@ Yuichi_Izumi
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> Or he could’ve seen it from the POV that without SAIC’s bailout, they wouldn’t even have survived to this day.
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Ssangyong was actually doing fine and turning a profit of $300 million a year when it was run by banks after the first bankruptcy during Asian financial crisis. Banks sold its stake in Ssangyong only because Ssangyong would need a direct cash injection of $1.2 billion to expand its R&D, which SAIC promised but never delivered.
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Without SAIC’s promised $1.2 billion injection, Ssangyong could not continue product expansion program and was stuck with its old model line-up.