With much attention paid to Kumho Tire suffering from a severe liquidity crisis, it seems inevitable in general that the company will be sold off to a foreign company in spite of the opposition of its labor union.
With the union actively opposed to selling off Kumho Tire to a foreign company, the government, its creditors, and the management have reached a consensus about the overseas sale of Kumho Tire, so the labor union’s final decision is garnering a lot of attention.
"As the next best way for job security, I agree that it is inevitable to sell off Kumho Tire to a foreign company," said Moon Seung-wook, head of the Office of Industrial Innovation and Growth at the Ministry of Trade, Industry and Energy, in a meeting to cope with issues surrounding GM Korea’s Gunsan Plant and Kumho Tire held by the Party for Democracy and Peace at the National Assembly on March 13.
Moon said, "If there is a Korean company that wants to take over Kumho Tire, it will be desirable to sell off Kumho Tire to the Korean company. However, Kumho Tire’s serious liquidity problem is precluding Korean companies from acquiring Kumho Tire."
Moon's statement was construed as representing the government's perspective and stance on Kumho Tire issues.
On March 12, Kim Jong-ho, chairman of Kumho Tire met with Cho Sam-soo, chairman of the labor union and Jeong Song-kang, chairman of the Gokseong Branch of the Kumho Tire Labor Union holding a sit-in on a transmission tower in Yeonggwangtong Sageori in Gwangsan-gu, Gwangju. In the meeting, Kim explained why it was inevitable to sell off Kumho Tire abroad and proposed a meeting with the labor union.
Chairman Kim said to the labor union that he confirmed the specific purposes of and conditions for Doublestar’s acquisition of Kumho Tire and Doublestar’s investment plan and told Doublestar the tire company’s core demands -- independent management, employment security, respect for the labor union and collective bargaining agreement and investment in plants in Korea and received a positive response from Doublestar.
"When filing for court receivership, the company must submit a self-rescue plan tougher than the current self-help plan to the court. If the court accepts the plan, an intensive restructuring will immediately begin. If the court judges that the self-help plan is not enough and Kumho Tire cannot survive on its own, Kumho Tire will be forced to enter its liquidation procedure like Hanjin Shipping,” said Baek Hoon-sun, executive director of labor and management cooperation, explaining the inevitability of the overseas sale of Kumho Tire.
Kumho Tire’s creditors already decided to sell Kumho Tires overseas and are steadily warning that if Kumho Tire is not able to submit a self-rescue plan including an agreement on attracting foreign investment by the end of this month, Kumho Tire will have no choice but to go into court receivership.
In this regard, unionists will go on a general strike, rejecting the overseas sale of Kumho Tire from 6:30 am on March 14 to 6:30 am of the next day. "There is no change in our stance against the overseas sale of Kumho Tire," a union official said on March 13.
Unless the union gives up taking issue with the sale of Kumho Tire to a foreign company, it is expected that the union will walk out in the process of selling Kumho Tire overseas, hindering production.