Kumho Tire workers threaten to strike, urge Doublestar to update local factories

Kumho Tire's manufacturing facility in the southwestern city of Gwangju / Yonhap

By Lee Min-hyung

Kumho Tire is at risk of an all-out strike by its workers, as China's Doublestar, which acquired the Korean tire manufacturer in 2018, has not fulfilled its earlier pledge to make equipment investments in Kumho's two outdated factories here, according to industry officials, Monday.

In April 2018, the Chinese company promised to invest 110 billion won ($82.6 million) in two of Kumho Tire's manufacturing facilities in Gwangju and Gokseong, South Jeolla Province. Kumho workers also agreed to keep their wages frozen for three years and return their bonus in exchange for the promise of investments by its largest shareholder.

Unionized workers argue that its management is “constantly making excuses” to delay the investments under the pretext of the possibility of relocating the manufacturing facilities. The union demands Kumho Tire's management and Doublestar keep their promises.

According to Kumho Tire's union, more than 79 percent of its unionized workers voted Saturday in favor of staging a strike but the union does not plan to take any immediate action and will continue negotiations with management.

Kumho Tire operates three manufacturing facilities in Korea. It also runs five factories abroad ― three in China, one in the United States and one in Vietnam. Doublestar is on track to downscale Kumho Tire's production capacity here and expand it at the overseas plants after the Chinese state-owned tire brand took over the Korean firm.

Kumho Tire produced 25,070 tires in Korea in 2022, slightly more than its overseas production of 23,281 during the same period. But this appears not to be the case for this year, as its production in non-Korean territories reached 15,228 in the first half, surpassing 12,278 tires produced in Korea. Doublestar invested 106.7 billion won to increase the production capacity of Kumho Tire's Vietnam plant in 2021.

Kumho Tire's Gwangju factory ― built in 1974 ― is capable of producing 16 million tires annually, accounting for more than half of the firm's total domestic capacity, but factory workers have continued to raise the issue of an urgent need to modernize the factory's equipment.

It will cost around 1.2 trillion won for the plant to relocate to another region, so Kumho Tire is looking for potential buyers for the factory site, which will take more time. This is the key reason why Kumho Tire's management and labor union have failed to reach a timely consensus.

“We will keep holding talks with the labor union to settle the ongoing deadlock in wage negotiations and our plan to relocate the Gwangju plant,” an official from Kumho Tire said.