Seoul - South Korean police commandos raided a factory at Ssangyong Motor Company to end a two-month occupation by hundreds of striking workers, local media reported Tuesday, amid concerns the strike could force the automaker into insolvency.

Thousands of riot police stormed Ssangyong Motor Co's assembly line to end the strike that started with angry workers opposing a massive layoff plan.

YTN TV broadcast footage showing a thick cloud of smoke blanketing the plant. Riot police dropped liquid tear gas from two helicopters in response to workers firing nuts and bolts from large slingshots and throwing Molotov cocktails at riot police.

Police estimated the number of protesting workers at 520 after 120 workers returned home last Sunday.

Ssangyong said Sunday it may seek liquidation if the standoff is prolonged by the union's refusal to compromise on layoffs.

Three days of talks with the union collapsed over differences on how many workers would be kept on.

"If the illegal factory occupation by the labour union and its violent actions continue to occur, we have no other choice but to consider a possible liquidation," Ssangyong's court-appointed manager Lee Yoo Il said in a televised news conference on Sunday.

The fifth-largest South Korean carmaker in February secured court protection from creditors due to rising losses after its major stakeholder, China's Shanghai Automotive Industry, abandoned management control during the bankruptcy protection process.

Hundreds of dismissed union members have occupied the factory in Pyeongtaek, 70 kilometres south of Seoul, since May 21 to protest the job cuts.

Ssangyong said in April it planned to eliminate 2,646 workers, or 36 per cent of its workforce, under a restructuring plan to avoid liquidation.

The company said that the strike had cost it 245.6 billion won (196.5 million dollars) in lost revenue. (dpa)