Ssangyong Motor Co. (KSE:003620), the South Korean unit of China's Shanghai Automotive Industry Corp. (SAIC), plans to slash 553 jobs due to a prolonged slump in sales, the company's labor union said Thursday.
 
The plan, which cuts more than 10 per cent of its workforce, was presented in a recent meeting between the management and the union, according to union official Ji Seon-yeol. 

"The Shanghai capital is trying to pass the burden of its management failure to workers," Ji said, referring to Ssangyong's Chinese parent.

Ssangyong - which sold 59,022 units in the first eight months of this year, down 30.6 per cent from the same period a year ago - is also moving to cut its 2008 sales target by as much as 44 per cent to 80,000 vehicles, another union official said.

The carmaker originally said it aims to sell 141,800 vehicles this year, compared with 131,637 units sold last year.

Ssangyong spokesman Cha Ki-woong in Seoul verified the union's claim, but declined to elaborate further.

Since early this year, Ssangyong, South Korea's smallest automaker, has been hit hard by high gas prices because its line-up is dominated by fuel-guzzling sport-utility vehicles and large-size sedans.

Ssangyong Motor chief executive officer Choi Hyung-tak is on course to fall short of the company's annual profit and sales targets this year, as the automaker posted a net loss of 69.9 billion won (US$60.6 million) on sales of 1.32 trillion won.

First-half revenues fell 18.6 per cent from a year earlier.

Amid dwindling sales, Ssangyong shut down its sole auto assembly plant in Pyeongtaek, about 65 kilometers south of Seoul, from July 31 to August 17, to cut down on inventory.

The 18-day shutdown cost up to 2.2 trillion won in lost production, the automaker said earlier.