Pantech Employees Return Salary to Keep Company Afloat
Pantech is a lesser known South Korean mobile device manufacturer established in 1991. It was listed by Gartner in 2012 as the second best selling South Korean manufacturer which led to Samsung buying a 10% stake in the company. However, in a drastic turn of events, the company is now in dire straits and is desperately trying to stay afloat.
Earlier in 2014, Pantech was faced with a deadline to repay debt accumulated due to struggling profits throughout the previous few quarters totalling a whopping KRW ₩ 480 billion (USD$ 475 million/MYR 1.5 billion). However, at the time, the company was in no position to do with their losses of KRW ₩ 292 billion (USD$ 264 million/MYR 930 million) in 2013 and KRW ₩ 6.7 billion (USD$ 6.1 million/MYR 21.4 million) in Q1 of 2014 alone. This led to the South Korean company filing for court receivership (the South Korean equivalent of the American Chapter 11 Bankruptcy) in August and has finally led Pantech to sell at auction in September.
Bidding for Pantech ended in November 2014. It was revealed that no one has bid for the company. Struggling to stay afloat, Pantech has resorted to asking its employees to return 20% of their monthly pay for the months of December to March. There seems to be no indication of resistance to the request from the employees. In fact a Pantech source has been quoted saying,
“Last month on November 28, we held an information session for our employees and asked for their consent and our employees decided to participate fully…”
There is speculation from industry sources that the move comes at the request of Pantech’s creditors and the Seoul Central District Court’s bankruptcy division. It also comes as a mitigative measures to delay layoffs in the light of South Korea’s currently unstable job market. Pantech apparently has roughly 1600 employees of which more than half are already on unpaid leave. However, the members of Pantech’s workforce seem optimistic in a purchase stating that wages will be repaid once the company’s situation improves.