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Mahindra Stands Indefinite On Ssangyong Labor Retention
According to Pawan Goenka, President, Automotive & Farm Equipment Division, M&M said that The memorandum of understanding (MoU) between the two companies, signed on August 23, only offers to "honor" the current wage agreements that SsangYong has signed with its unions.
He added that Mahindra will hope to grow employment as the volume grows though we have no specific commitments.
Ssangyong has many records of labor strikes in the past. In 2009, Ssangyong's production of its SUV hugely faced a loss because of labor strikes. The Ssangyong management was prompted to cut down its work force by one-third, losing 3000 men.
With acquisitions, Mahindra will be helped in a larger scale if it is flexible with the headcount. M&M was the chosen bidder for the ailing South Korean SUV maker. Mahindra has paid 5 percent of the deal amount. Mahindra will start confirmatory due diligence on Monday, which will last five to six weeks. By November of this year, the deal is anticipated to close.
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