Gov’t hit for ignoring businesses’ outcry

By Park Si-soo

Chaebol, the country’s mighty family owned conglomerates, are desperate to cut costs in difficult economic times like these. However, with their dominance in the main markets, which sometimes run against the limits of acceptability, enabled by a government pushing export-driven strategies, big businesses will have to endure bureaucratic pep talks from time to time about investment and employment.

The latest session took place Wednesday when Knowledge Economy Minister Hong Suk-woo invited the chief executives of the country’s 30 biggest business groups to a breakfast meeting at the Lotte Hotel in Seoul.

Hong and the corporate bigwigs mingled and shared some laughs on the sidelines before the minister sat down and delivered his opening remarks that revealed the real purpose of the event.

Hong claimed that big firms, which have been weathering the downturn significantly better than their smaller corporate rivals, should be ready to invest and hire more in the second half of the year. Perhaps to massage the egos of the CEOs, Hong warned against pre-election chaebol bashing, including talk about ``economic democracy’’ aimed at easing the upward transition of economic power to top-tier conglomerates.

The problem is that, with President Lee Myung-bak now seen as the lamest of lame ducks, corporate leaders seem to be tuning out speechifying policymakers.

Asked about how the previous meeting with the minister in January was meaningful in terms of communication, Park Jun-hyoung, president of Hyosung’s corporate strategy center, told The Korea Times, “Not that much.”

He criticized the economy ministry’s ignoring the outcry from companies amid the deepening recession, even in this open forum.

“It’s difficult to get our voice heard by the government since it has its own policy goals,” Park said, referring to the current ``shared-growth’’ policies aimed at distributing more wealth to small businesses and low-income employees.

Chaebol leaders have been barking at the moves, emphasizing that the country’s economy is still driven by exports and they drive them.

Hyosung, like many other big firms here, was hit hard by the economic downturn during the first half of the year, posting 88.3 billion won ($77.8 million) in operating profit, down 42.4 percent from a year ago. But it fell short of taking the mid-tier conglomerate out of a list of companies that were called on by those “above” to “invest more and recruit more,” industry insiders said.

Most CEOs might have attended the meeting in the hope that their candid expression of policy views would make changes to them. But the minister’s opening remarks hinted that there would be little room for change.

“I know your companies are facing a tough situation and the country’s business outlook is not bright. But in these tough times, companies should be more active in investment and employment,” the minister underscored. “I will do my best to help your business. What I want you to do for me is make more investments and hire more people.”

The meeting included an 85-minute free discussion session, which was closed to the media. Detailed information about issues discussed was not immediately available.

Following the meeting, the ministry said in a statement that Korea’s 30 biggest companies are committed to investing 8.2 trillion won and hiring 61,000 people during the second half of the year.

Companies whose leaders were in attendance included Samsung, Hyundai Motor, SK, LG, Lotte, POSCO, Hyundai Heavy Industries, GS, Hanwha, KT and Doosan.