Kumho Tire workers to go on strike

Kumho Tire’s labor union urges the management to withdraw its plan to sell the tiremaker to a foreign enterprise, during a rally held in Gwangju, Friday. / Yonhap

By Park Jae-hyuk

Kumho Tire workers have decided to stage a strike to oppose a foreign acquisition of the financially troubled company, the nation’s second-largest tiremaker’s union said Tuesday.

But the Ministry of Trade, Industry and Energy has reiterated its support of the management and creditors’ decision to sell the Korean company to China’s Doublestar Tire.

As a result, the conflict between the two sides will highly likely escalate.

According to the union, 4,000 members, including 3,500 workers at the tiremaker’s three factories in Gwangju, Gokseong County in South Jeolla Province and Pyeongtaek in Gyeonggi Province as well as 500 irregular employees will hold a 24-hour walkout from 6:30 a.m. today to 6:30 a.m. Thursday.

Last week, the union demanded creditors negotiate over withdrawing the Doublestar plan and the payment of overdue wages. It also demanded creditors answer it by noon Tuesday.

Kumho’s main creditor, the Korea Development Bank, rejected the demands Monday.

“Considering Kumho Tire’s financial condition, attracting foreign capital is the best way to stabilize its management,” the state-run bank said in an official letter sent to the union. “We want the union to agree on a self-rescue plan and the attraction of foreign capital by the end of the month.”

The industry ministry also said a foreign acquisition was inevitable to maintain employment and normalize management.

“A domestic company’s acquisition of Kumho Tire is best, but no Korean company will consider buying a company with a liquidity crisis,” a ministry official said during a meeting with the Party for Democracy and Peace, Tuesday. “Considering the impact on the industry, local economy and jobs, saving the company is better than liquidating it.”

In the meantime, Kumho Tire said Chairman Kim Jong-ho talked with two union leaders staging a sit-in protest on a transmitting tower near the company’s Gwangju factory, Monday.

“We must avoid court receivership which would deal a severe blow to both labor and management,” the chairman told the leaders. “For this, please stop the protest and let us talk about practical measures to solve the problems.”

Kim also informed the union what he and creditors confirmed during a meeting with Doublestar Chairman Chai Yongsen in China last week.

He said the Chinese businessman answered positively to his requests, including maintaining Kumho Tire’s independent management, job security and Doublestar’s investment in Korean factories.

The Kumho Tire chief has claimed the acquisition is essential for the company’s survival at this juncture despite the objections of the union.

In a message sent to employees last week, he said the company “has no reasons to object” to the main creditor’s plan to turn over the debt-ridden company to Doublestar.

To avoid any massive layoffs and seek the company’s long-term prosperity, the chairman said the tiremaker will ask creditors to sell it to a foreign company that is willing to agree to his requests and will not lay off workers.