Doublestar chairman visits Korea to meet KDB, Kumho Tire union
Doublestar Chairman Chai Yongsen, center, visits the Korea Development Bank on Yeouido in Seoul, Wednesday, to discuss the acquisition of Kumho Tire with its creditors. / Yonhap
Chinese firm makes last-ditch effort to acquire Korean tiremaker
By Park Jae-hyuk
Doublestar Chairman Chai Yongsen visited Korea, Wednesday, to discuss his company's planned acquisition of Kumho Tire with its creditors led by the Korea Development Bank (KDB).
His visit to the state-run bank was first on the chairman's official schedule in Korea.
He will attend a press conference to be held at KDB headquarters on Yeouido in Seoul Thursday to announce his plans for the acquisition and show his determination to buy the debt-ridden Korean tiremaker.
Kumho Tire said the company has no idea what the Chinese businessman's detailed itinerary is.
Industry officials expected Chai will meet with leaders of Kumho Tire's union during his visit, as its approval of the foreign acquisition is necessary for the takeover.
Although one domestic news outlet reported the union has declined to meet Chai, a spokesman denied the report.
“We are always open to conversations with anybody,” he said. “We are not sure about the chairman's specific schedule, but we expect our leaders will meet him at the union's office in Kumho Tire's Gwangju factory.”
During a meeting with Korean reporters at Doublestar's head office in Qingdao last week, Chai said he was open to talks with Kumho Tire's union and was able to visit Korea soon to meet them.
The chief of the Chinese tiremaker guaranteed Kumho Tire's independent management and Doublestar's investment in Korean factories, so he will likely try to dispel the union's worries during any meeting.
The union has opposed the Chinese company's acquisition, saying it will become a repeat of the sale of SsangYong Motor to China's Shanghai Automotive Industry in 2004, which was criticized as the Chinese company allegedly acquired SsangYong's core technologies while not investing enough to strengthen the Korean carmaker's competitiveness.
Given that Chai avoided mentioning workers' job security, however, he may fail to persuade the union.
Moreover, the KDB's attempt to insert a no-strike clause into the deal has enraged the union, which alleged the main creditor has accepted Doublestar's unreasonable demands for a quicker selloff.
Kumho Tire's creditors said they will file for court receivership for the financially troubled company, unless the company agrees with the self-rescue plan by March 30. If so, Doublestar will cancel its investment plans.
Doublestar has offered to invest 646.3 billion won ($603 million) in new Kumho Tire shares, which would allow the Chinese tiremaker to become the largest shareholder with a stake of 45 percent, and KDB-led creditors to collectively own a 23.1 percent stake.
However, KDB Chairman Lee Dong-gull and the union's leaders failed to reach an agreement in a 90-minute meeting earlier this week.
Against this backdrop, 600 non-union workers at Kumho Tire visited the Gwangju factory, Wednesday, to urge the union workers to accept the foreign acquisition.