SEOUL, KOREA - A South Korean automaker said Monday it would be unable to pay workers on time this month, and another announced a temporary shutdown of all its plants as the industry struggled with a slump in demand.

Some 500 unionists protested outside the Ssangyong Motor plant after the firm, the country's smallest automaker, told staff it was impossible to pay salaries on time due to a lack of operating funds.

A spokesman told AFP the monthly payment was due Wednesday but would have to be delayed indefinitely.

Ssangyong said earlier this month that it had asked for a cash injection from its Chinese parent, the Shanghai Automotive Industry Corp.

Chosun Ilbo newspaper said Monday the request was turned down because the union in Korea had called on Chinese executives to resign. Ssangyong officials declined comment on that report.

The ailing automaker says it expects a net loss of more than 100 billion won (S$0.11 billion) this year.

For the third quarter Ssangyong, which was acquired by the Chinese firm in 2004, posted a net loss of 28.2 billion won - a fourth consecutive quarterly loss. Sales plunged 63 percent year-on-year to 3,835 units in November.

Ssangyong halted production from December 17 until the end of the month to reduce inventory.

GM Daewoo Auto and Technology, the South Korean unit of US giant General Motors, said separately it would shut down two more plants from Monday until January 4. Its main Bupyeong plant has already been idle since December 1.

GM Daewoo said production would resume at all plants on January 5. Last month the company saw sales plunge 28.8 percent from a year earlier to 62,256 vehicles.

Top carmaker Hyundai has reduced production at all overseas and local plants.

The Korea Automobile Manufacturers Association has forecast that domestic sales by local automakers will drop 8.7 percent next year to 1.05 million units, the lowest since the financial crisis in 1998.