KDB fails to persuade Kumho Tire union

Korea Development Bank Chairman Lee Dong-gull, left, talks with Kumho Tire's union leaders at the tiremaker's factory in Gwangju, Monday. / Yonhap

Creditors plan to sell struggling tiremaker to China's Doublestar

By Park Jae-hyuk

Kumho Tire's creditors and labor union have reaffirmed their differences over the foreign acquisition of the financially troubled company during a meeting between Korea Development Bank (KDB) Chairman Lee Dong-gull and the tiremaker's union leaders at the company's factory in Gwangju, Monday.

Lee representing Kumho Tire's creditors tried to urge the union members to agree to the creditors' plan to sell the Korean company to China's Doublestar Tire.

It was the first time the head of the main creditor has met the union leaders since KDB announced its plan.

The two sides, however, failed to reach an agreement in the 90-minute meeting.

“We have tried our best for the survival of Kumho Tire, which has a decisive effect on the local economy, subcontractors and small retailers,” Lee said before the meeting. “I want to resolve the union's suspicions, so as to achieve a good result.”

He has maintained his stance, saying court receivership will be the only alternative to foreign acquisition.

“Unless the creditors withdraw the Doublestar Plan, we will not meet them again,” one of the union leaders told reporters after the meeting.

The labor union has decided to stage a five-day strike starting today.

According to Kumho Tire's union, it will stage eight-hour temporary walkouts from Tuesday to Saturday at the company's factories in Gwangju and Gokseong County in South Jeolla Province. The union members will also hold a rally in Gwangju, Saturday.

The workers staged a temporary walkout on March 9 and a strike last Wednesday.

Against this backdrop, the conflict between Kumho Tire's union workers and non-union workers has escalated.

During a press conference held in front of Kumho Asiana's headquarters building in downtown Seoul a few hours before the meeting between the KDB chairman and the union leaders, 1,500 non-union workers said they support the foreign acquisition.

“We must avoid court receivership that will lead to liquidation,” a representative of the non-union workers said. “Attracting foreign capital is the only way to normalize our company, so the union should enter negotiations to draft a self-rescue plan.”

Kumho Tire's union has claimed the acquisition could become a repeat of the sale of SsangYong Motor to China's Shanghai Automotive Industry in 2004.

The sale was criticized as the Chinese company allegedly took over SsangYong's core technologies while not investing enough to strengthen the Korean carmaker's competitiveness.

Doublestar Chairman Chai Yongsen, however, dismissed the union's worries during a meeting with Korean reporters at its head office in Qingdao last week.

The Chinese businessman guaranteed Kumho Tire's independent management and Doublestar's investment in Korean factories.

However, he was reluctant to mention job security of the workers.