Samsung Sells, Hyundai-Kia Buys
2 Groups Go Opposite Ways on Corporate Jets
By Jane Han, Kim Yoo-chul
Samsung Group and Hyundai-Kia Automotive Group are going in opposite directions about corporate jets.
Samsung is selling one of its three corporate jets as part of efforts to cut down on expenses, while Hyundai is buying one.
According to Samsung officials, the group is in talks with some unnamed buyers for the sale of one of three corporate jets it is operating.
"We are selling our Global Express jet, made by Canada's Bombardier, for about $50 million," a Samsung spokesman said.
In contrast, Hyundai has purchased a jet at the price of $60 million, currently being checked for maintenance and customs clearance before going into service.
The auto giant first did what a cost-conscious company would do by chopping wages by 10 percent, suspending most corporate events and even partially discontinuing employee shuttle-bus services last month.
But then it turned around this month and brought in a whopping 90-billion-won private jet to fly its executives around the world.
The untimely splurge instantly became easy bait for criticism, with critics chewing out the move as hypocritical and out of touch with reality, drawing comparison to ailing U.S. auto firms.
U.S. carmakers General Motors and Ford were picked apart recently when their CEOs flew into Washington D.C. on their private jets to ask for a government bailout.
The Korean firm's sales and overall business is in far better shape than its U.S. peers, but observers still say the economy is bad and common sense dictates that private jets should remain at the hangar for now.
``Companies are bleeding money left and right now, so it's not exactly encouraging to see another firm go out and buy itself a money-guzzling jet,'' said one executive at the country's top 30 corporation. ``That's not the message we want to send to our employees, nor to society.''
The carmaker's union claimed that 90 billion won was enough to pay 245 temporary workers for 20 years.
But Hyundai-Kia defended its purchase by claiming that the jet, which reportedly costs 50 billion won in maintenance per year, is ``a necessity in doing global business.''
Currently clearing safety checks, the brand-new Boeing Business Jet 737 (BBJ-737) is big enough for 18 passengers and has the capacity to fly non-stop from Seoul to the Midwestern United States. It will start servicing Hyundai executives in the first half of this year.
``Efficiency is crucial when doing business, and the top management decided that an aircraft would be needed to do faster and better business,'' said a Hyundai spokesman, emphasizing that the purchase was made last year.
Hyundai's BBJ 737 is the latest addition to three private corporate jets currently being used by Samsung, LG and Hanjin.