How much longer can Ssangyong survive?

By: Martin Kahl, Friday, August 07, 2009, AutomotiveWorld.com

This week, South Korean riot police made several raids on Ssangyong’s factory in Pyeongtaek in order to quell an illegal occupation of the plant by Ssangyong workers and protestors that began on 31 May. The 77-day plant siege – the most violent industrial action in the company’s recent history – followed a bankruptcy court’s approval of a restructuring plan involving the loss of 2,600 jobs, or approximately a third of Ssangyong’s workforce. The company was granted bankruptcy protection in February 2009 after its parent company, Shanghai Automotive (SAIC) and the Korean Development Bank (KDB) refused to provide the company with further funds.

The former Daewoo subsidiary was spun off in 1999, enabling it to escape the collapse of its former parent. Having effected a remarkable turnaround, it became a profitable SUV specialist, and in 2003 was put up for sale by its creditors. Chaotic negotiations ensued, with seven companies in the running, including Chinese state-run chemical company Blue Star Group, GM, Renault, a US pension fund and a Saudi prince. In January 2005, SAIC completed its acquisition of Ssangyong with a payment of Won 590bn (US$573.5m at the time) for a 48.9% stake, which it later increased to 50.91%.

The acquisition was part of SAIC’s plan to become the world's sixth-largest vehicle manufacturer by 2020; it provided SAIC a presence in the SUV segment and looked good for Ssangyong too, giving it access to the Chinese market and apparent financial stability.

However, for years, the Ssangyong numbers have failed to add up: one main plant with an annual capacity of around 220,000 units employing over 7,100 workers making just over 100,000 units of the entire Ssangyong range (Actyon Sports SUT pick-up; Actyon, Kyron and Rexton SUVs; Chairman and Chairman W luxury sedans; and Stavic/Rodius minivan) - less than 5% of which was sold outside the domestic market.

These inconsistencies were reflected in the company’s financials. Ssangyong reported a loss in 2005 of Won 103.4bn (US$110.7m), and a loss in 2006 of Won 195.9bn (US$209.74m). By 2008, losses stood at Won 709.7bn (US$530.3m), and in early 2009, the company faced liquidation. On 6 February, SAIC relinquished management control of Ssangyong (it retained its 51% stake, although this will now be reduced) and the company was granted bankruptcy protection.

From the outset, Ssangyong’s highly unionised workforce was suspicious of SAIC’s intentions, fearing it would drain off Ssangyong’s intellectual property rights and transfer manufacturing to China. Relations became further strained when it became clear that SAIC was unlikely to fulfil investment commitments, and worsened when the Chinese parent company sacked Ssangyong executives and replaced them with SAIC executives. The workforce has been in a seemingly constant battle with management, and strikes have become commonplace.

Frequent announcements of production cuts and plant idling at Ssangyong became confused with proposals to build two new production lines. Ssangyong even claimed it had five new engines and around 30 new vehicles in development, for launch by fiscal 2011. Although the company has displayed concept vehicles at recent motor shows, such as the near production-ready C200 crossover, and the Wz, said to be the replacement for the elderly Mercedes-Benz W124-based Chairman sedan, it has, in reality, an ageing model line-up of unattractive vehicles, with no near-term product launches planned.

The recent occupation ended with an agreement to reclassify a proportion of the redundancies as long-term unpaid leave of absence. The plant’s interior was relatively unaffected by the occupation, and Ssangyong management plans to restart production at the earliest opportunity. But such a move would completely ignore the stark realities facing Ssangyong: the company reportedly owes Won 300bn (US$244m) to around 600 suppliers and creditors, and a further Won 240bn (US$195m) to the KDB; the factory siege left a 15,000-unit sized hole in the company’s already dwindling output, costing it a further Won 316bn (US$258.3m); and if it does build more vehicles, Ssangyong has to sell them. Even before it went into court receivership in February 2009 it had a domestic market share of no more than 5%, and the 73.9% year-on-year decline in the company’s first half sales results does little to boost optimism.

If, or indeed when, the company is declared bankrupt, the chances of finding a buyer would be slim at best. Attractive in 2003 for its SUV specialisation, the company’s technology is now irrelevant, its increasingly unpopular product range is outdated, and there is no new model launch programme in place to attract even the most optimistic bidder. Under the terms of its bankruptcy protection, Ssangyong has until 15 September to come up with a reorganisation plan. The company’s management must now decide whether there is a business case for carrying on – perhaps only for a few weeks or months longer – or whether it would be better to simply throw in the towel now.

Published on Friday, August 07, 2009

Oracle-Sun Deal Signals a Major Shift for IT Industry

By Jennifer LeClaire
April 21, 2009 8:44AM

Oracle's $7.4 billion acquisition of Sun Microsystems has major implications for the high-tech world that will unfold in the months ahead. There is already plenty of speculation about how the merger will position Oracle to compete and plenty of optimism about what this megamerger means for the high-tech industry in the midst of a global crisis.

A couple of things are certain:

Innovation is a likely fruit of the acquisition. By acquiring Java's programming language, Oracle can explore continued innovation and investment in Java technology that will benefit its customers and the industry.

And with the acquisition of the Sun Solaris operating system, Oracle can optimize its database Relevant Products/Services with new features.

"Sun is a pioneer in enterprise Relevant Products/Services computing, and this combination recognizes the innovation and customer success the company has achieved. Our largest customers have been asking us to step up to a broader role to reduce complexity, risk and cost by delivering a highly optimized stack based on standards," said Oracle President Charles Phillips. "This transaction will preserve and enhance investments made by our customers, while we continue to work with our partners to provide customers with choice."

Oracle's End-to-End Strategy

The merger represents a bold strategic vision and will be truly transformative for Oracle, according to Murray Beach, managing director of TM Capital, a leading investment bank. By acquiring Sun, Beach said, Oracle is evolving from a leading provider of enterprise applications to a full-service provider of IT systems on par with IBM Relevant Products/Services.

Beach said Oracle and Sun have been strong strategic partners for years, and there are many reasons the combination makes sense. He said the merged company will be able to pitch customers with the software, the operating system, the middleware, the database, and the servers necessary to roll out new system deployments.

By centralizing the development of Oracle's software with Sun's Solaris, Java and other products, the combined company should be able to produce cohesive systems with superior performance Relevant Products/Services and lower implementation and integration costs, Beach said. He noted that while acquisition rumors focused on hardware Relevant Products/Services suitors such as IBM, Hewlett-Packard Relevant Products/Services or Dell, Oracle is the lone software vendor with which a deal truly makes sense because of the Java and Solaris connections.

How Will Microsoft Relevant Products/Services Cope?

"Neither Red Hat nor Microsoft should be happy about these developments. Red Hat, which has been a rumored acquisition target for Oracle for quite some time, must now be a lower priority within Oracle's strategic vision," Beach said. "Microsoft, which has been slow to gain traction with large customers, may have been elbowed out of the enterprise market by this move. With both IBM and Oracle now offering end-to-end IT systems, Microsoft may find it challenging to climb the ladder from its traditional SMB Relevant Products/Services focus to larger enterprise sales in which it can only offer the software component of a broader system deployment."

From a financial perspective, Beach said the announced purchase price implies an attractive premium. The $9.50 per share offer is 42 percent more than the previous day's closing price and a 91 percent premium over the company's value before the IBM acquisition rumors began.

"This deal proves that despite current economic conditions, acquirers are still willing to pay significant premiums for strategic assets. Also, despite the size of the premium paid, this deal is expected to be highly accretive to Oracle," Beach said. "The fact that Oracle paid a sizable premium but can also project significant earnings accretion shows that there are real bargains are out there for buyers who want to take advantage of the depressed valuations in today's equity markets."

El mayor problema de Linux

Hace ya 10 años que uso Linux. Empece con una Red Hat, luego emigre a SuSE, estuve con un par de versiones de Mandrake, probe Debian (no mucho la verdad), y hace tres versiones que estoy con Ubuntu. A estas alturas de mi vida linuxera, en terminos generales estoy muy satisfecho, sin embargo, comparando mi vida anterior con Windows y sus versiones, y despues de años de leer testimonios a favor y en contra de Windows-Linux, observo un problema mayusculo con Linux:

El Sindrome de Negacion Auto Defensiva o SNAD como lo he bautizado.

Que es el SNAD ? Es simplemente el hábito de negar o disculpar cualquier defecto del software libre solo porque se trata de software libre. Esto es MALISIMO, especialmente para el software libre !. El SNAD nos acostumbra a usar miles de aplicaciones medio o mal desarrolladas para sustituir productos comerciales de años de desarrollo. El SNAD nos lleva a decir cosas como “a mi me encanta navegar en modo texto en una consola, por qué usar Flash…o imagenes ?”, o “ehh pero estos programas para windows son para idiotas, hacen todo por uno ! a mi me gusta PENSAR”. Y lo peor es que el SNAD nos lleva a justificar la pobre o mediocre programacion de aplicaciones. (Y NO ESTOY DICIENDO QUE TODAS LAS APLICACIONES LIBRES ESTEN MAL DESARROLLADAS, OK ?)

Si, ya me imagino la horda furiosa. Calma, esperen a leer todo…

Dejenme explicar mis sagaces descubrimientos antes de bombardearme con SPAM (el lector sagaz habra comprendido que tirarme con viruses no servira de nada).

El novel usuario linuxero (incluido quien escribe), pasa por una pubertad, una era de descubrimiento similar a cuando uno descubre el socialismo. Supongo que esto se deberá a que ya a nadie le interesa la política y canaliza los instintos revolucionarios en algo mas pragmatico como el software, no lo se. Así , convertidos en una especie de Cyber Che Guevara, enarbolamos la bandera de la Justicia Social Cibernetica y nos convertimos en paladines del software libre. Primeros sintomas del SNAD. El paciente en esta etapa de SNAD suele burlarse de sus compañeros de trabajo apegados aun a aplicaciones burguesas con brillantes planteos marxistas intelectualisimos.

Aprendemos a “conocer el sistema”, a “intimar con el codigo”, a “ver la matrix” etc etc… y pasamos de lo que eramos, cerdos burgueses instalando paquetes y actualizaciones como automatas, a idealistas revolucionarios compilando paquetes y actualizaciones como automatas. Nos sentimos los nuevos caballeros hackers del Rey Arturo lidiando con configures, Makefiles, y una tonelada de includes.h. Pero claro, nada es perfecto en este mundo (salvo quizas Andrea Frigerio o Angelina Jolie) y los programas lo son mucho menos, así que pronto empiezan a fallar. A mostrar la hilachax de la matrix, por asi decir.

Ante esta desilusion las victimas del SNAD reaccionamos por una cuestion de autonegacion convirtiendonos en una especie de defensores de la incomodidad. Lo que antes nos hacia poner el grito en el cielo contra importantes corporaciones (por ejemplo una pantalla azul y un error 0E) ahora nos hace renovar nuestros votos de esperanza en que el BUG se solucionara si apoyamos al joven creador que pergueñó esta aplicación (me atreveré a decirlo) “defectuosa” y atacamos furiosamente a aquellos que se atreven a señalar nuevos fallos de nuestro querido sistema. En esta etapa, el paciente suele mostrar a sus amigos su flamante linux y lo defiende con frases como “Y para que quiero Bluetooth en el escritorio ?” o “Ay si, no todo en la vida es arrastrar y soltar !”, o en los foros por ejemplo, ante la consulta “Gnome da error al hacer login” salen respuestas automaticas “A mi me anda perfectamente, algo habras borrado”. La culpa de los errores es del usuario irresponsable.

Poco despues de este estadio suele asaltarnos una repentina (y virtuosa) voluntad por ahorrar recursos. Quizas conmovidos por un especial sobre el Amazonas que vimos en NatGeo, vaya one to know. Entonces queremos un entorno que consuma menos recursos. Y de paso tenga menos bugs. Asi pasamos de Gnome y KDE a entornos mas antiguos y supuestamente mas estables como FVWM o XFCE. Al principio de esta etapa, sufrimos un choque estetico violento, (es que ambos son bastante feos) pero al mismo tiempo nos sentimos mas cercanos a los portadores de la Luz, los invisibles Hackers Originarios que crearon todo.

Ya no existen los CDs o pendrives que se automontan en el escritorio, ni las consolas transparentes con efectos 3D. Y NOS PARECE BIEN. Quien quiere todos esos efecto especiales que consumen gran cantidad de preciosos recursos ? Estamos en una fase aguda de SNAD. Dejamos de usar Thunderbird y otros “clones de Outlook”como los llamamos con gallardía e indolencia, y nos abocamos a Pine, Alpine y otros bichos en modo texto. Incomodos, arcaicos, pero que no consumen recursos !.

Pero esta etapa evoluciona tambien, quizas tras el encuentro fortuito con usuarios de Mac y luego de ver con un poco de envidia lo facil que son sus vidas. Entonces (testarudos como todo linuxero) decidimos hacerle frente y mostrar al mundo que Linux tambien puede ser comodo (y sin consumir recursos !). Entonces llegamos al extremo de recuperar funcionalidades a traves de pequeños scripts artesanales que hacemos a medida de nuestra maquina. Asi logramos que aparezca un icono de CD en el escritorio cuando se monta uno, etc, etc. Esta etapa la llamo “del usuario criptico“. Nadie es capaz de usar nuestra maquina ademas de nosotros mismos (que incluso a veces olvidamos la multitud de trucos necesarios para conectarnos a una red LAN).

Hay en la vida del paciente de SNAD sin embargo, oportunidades en las que todo se sacude, y nos lleva a una cura definitiva si tenemos suerte. Una de tales oportunidades tipicas es cuando debemos cambiar de distribucion, hecho que nos obliga a perder no menos del 60% de nuestras configuraciones personalizadas y nos hace replantearnos si tanta paja mental tiene sentido.

Mi nombre es Claudio Andaur y sufri de SNAD muchos años. Ahora estoy en proceso de curacion y con la ayuda de mi familia (que no entiende un pomo de software y me obliga a solucionar las cosas y no poner excusas) saldre adelante. Algo tengo claro, usar Linux involucra necesariamente aprender sobre Linux y hardware y un monton de cosas. En estos años y luego de pasar por muchas etapas de SNAD aprendi a tener paciencia y solucionar problemas y a no recomendar a nadie cambiarse a un sistema que no conoce. Y usted en que etapa del SNAD está ?

Hasta la victoria siempre !