Political Community Urges to Stop Kumho Tire Sale

The sale of Kumho Tire has hit a tipping point at the last minute. Kumho tire creditors have decided to hold a meeting to come up with a new offer for the use of the Kumho trade mark on July 7. However, politicians have urged them to stop the sale of the cash-strapped tire company.

At the policy coordination meeting held at the National Assembly on July 6, Lee Gae-ho from the ruling Democratic Party said, “I am seriously concerned at how the Korea Development Bank, which should protect jobs in the nation, pushes ahead with the sale of Kumho Tire. The bank allows China’s Doublestar to form a consortium while disallowing Kumho Asiana Group, which has the right of first refusal for Kumho Tire, to form a consortium.”

Lee also said, “I am so worried that the state-run bank forgets its duty blinded by money by penalizing a domestic company but turning to foreign company’s advantage. When a foreign company acquires Kumho Tire, not only the regional economy in Gwangju City and South Jeolla Province will be adversely affected but also lots of jobs will be lost.”

He added, “I can’t help but worry about the technology leaks after shutting down domestic plants and leaving for China in where wages are low if a Chinese takes over Kumho Tire, which has the best technology in the world. We should help domestic companies actively participate in the bid.” As Lee, who is the fourth policy coordination committee chairman of the ruling party, officially announced his opposition to the sale of Kumho Tire, the deal is in a state of drift again. Since the fourth policy coordination committee is also in charge of the Trade, Industry and Energy Committee at the National Assembly, it can directly affect the sale of Kumho Tire.

Kumho Tire creditors are trying to negotiate with Kumho Asiana Group Chairman Park Sam-koo by offering the final revision of the use of Kumho brand trademark. However, they have now faced difficulties as the ruling party expressed opposition. The creditors have not much time because they need to receive approval of the acquisition of Kumho Tire’s defense business from the government in order to complete the sale in September.