Gwangju factory’s operation suspended, manufacturing disrupted
The Union and creditors are in serious disagreement over the company’s takeover by an overseas investor.
Whilst creditors are maintaining their position that there is no other alternative than selling the company to an offshore entity, the union is calling for the abolition of the plan and have been on strike since 14th.
In the midst of this tension, Jong Koo Choi, Chairman of the Financial Services Commission, entreated the union to accept the plan proposed by the creditors.
Around 300 union members from the Gwangju and Gokseong factories and members from the Pyungtaek factory participated in the strike to stop Doublestar’s takeover of the company.
Due to the strike, manufacturingis expected to be disrupted as a result of the suspended factory service.
On the 9th, the union suggested opening a communication channel to discuss the matter, yet the creditors maintained their original position; thus the strike was carried out.
The creditors reported, “Considering the liquidity issue, there is no alternative to sustain the creditor’s joint management. We expect the union to complete the agreement among the union members and to agree to accept offshore capital to revive the business, and report back to us with your decision by the 30th of March.”
Government views that the takeover of the company is inevitable.
Mr. Choi pleaded with the union, “Our capital investment from Doublestar is largely based on our judgement that the resumption of business service is impossible without foreign capital support. I hope the union is able to view the current management crisis more sympathetically and comply with the creditors’ decisions.”
A civil officer from Ministry of Trade, Industry, and Energy said, “If there is a domestic company who can purchase Kumho Tire, that would be ideal, yet given that the risk of liquidity is fairly high, there is no onshore company to pluck up that courage.”
With the creditor’s final notice, the union and creditors will experience more tension on this matter.
If by the 30th the revival plan is not submitted to the creditors, the company is likely to go under administration, in which case, the company must wait for strict judgement from the government and submit an intense, comprehensive company restructuring plan.