The protesters were demonstrating against a plan to enforce massive job cuts and in support of about 600 workers who have been occupying a paint shop in the plant for more than two months.

The siege has paralysed production and Ssangyong says it has cost the company about $184m in lost output.

Explosion fears

A union spokesman has warned that the workers will try to resist if police launch an assault, raising fears of a deadly outcome to the standoff because the paint shop contains highly flammable materials.

Protesters were demonstrating against a plan to enforce massive job cuts [Reuters]
Water and food supplies to the paint shop were cut off several days ago to put pressure on the workers, but they are believed to have stocked up enough supplies to hold out for a considerable time, a company spokesman said.

South Korea's fifth-largest carmaker has been in court-approved bankruptcy protection since February after falling sales and mounting debt raised questions about its survival.

As part of its bankruptcy protection process, it has been carrying out a major restructuring, aiming to shed about a third of its work force.

Some 1,670 workers have left the company voluntarily while of the thousand or so who opposed the move, some were later fired, a company spokesman said.

There has been no dialogue to defuse the row since late June when the union rejected a compromise offer from management to rehire some laid off workers by 2012 and give others help to find other jobs or opportunities to retire with more benefits.

A union spokesman has said the company should present a better proposal regarding the layoffs.

Ssangyong is majority-owned by Shanghai Automotive Industry Corp, one of China's largest auto manufacturers, although it lost management control in the bankruptcy protection process.