Approach needs restructuring
The restructuring agenda of the troubled shipping and shipbuilding sectors has lost direction. A former minister, who had been involved in the sweeping corporate restructuring campaign following the Asian financial crisis in late 1990s, claims the agenda is lost. First of all, he claims nothing definitive has been said by top government officials.
The president’s only comment on the issue was that she approved of the idea called Korean style quantitative easing, by having the central bank print money to fund corporate restructuring. The government seems to interpret it as an order to come up with ways to get the work done without burdening government finances.
After the president’s mention of the idea and the ruling party’s crushing election defeat, Deputy Prime Minister on the Ekjdguestconomy Yoo Il-ho vowed to push ahead with corporate restructuring. These days we hear little from him on the issue. In last week’s cabinet meeting, he merely said the government should prepare for the unemployment fallout from restructuring. So let’s examine the feet of officials to read their real intentions – whether their minds are really on restructuring or just feigning.
Minister of Trade, Industry, and Energy Joo Hyung-hwan has a knack of delivering what the boss wants. Where his feet are headed would be what the president is interested in and keen on. When restructuring issues dominated state affairs and news last month, his feet had been everywhere, except where they should really have been.
He flew to Iran, Egypt and later Indonesia. He accompanied the president on her overseas trips and signed piles of memorandums of understanding on business ventures. He did not once set foot in Geoje and Ulsan, home to Korea’s major dockyards. In fact, his feet were never pointed at them in the first place.
The essence of restructuring is not shedding jobs and injecting fresh funds, but rebuilding an organization and industry. It is the business of redesigning industries to fuel the economy anew, or how shipping and shipbuilding can re-contribute to the country’s future. The sectors must be realigned based on the prospects of supply and demand and competitiveness. Mapping the outline is the work of the industry minister.
But Joo is nowhere near the issue. His ministry clearly drew the line saying the work falls under the jurisdiction of its creditor bank, or state-run Korea Development Bank (KDB). The same ministry always took authority when there was regulatory power at stake.
The next person we should pay attention to is KDB chairman Lee Dong-geol. Lee, who took office in February, pledged “preemptive” restructuring of troubled companies. But the bank’s actions on troubled Hyundai Merchant Marine (HMM) were hardy preemptive.
Although it claimed lowering the expensive charter fees was essentially a further bailout, it did not respond when HMM repeatedly called for help in its negotiations with foreign ship leasers.
Former President Kim Dae-jung invited LG Group Chairman Koo Bon-moo to the presidential office to persuade the group to give up the semiconductor industry and help solve the overcapacity in the sector. The commander should take command on the battlefield.
Then there is Yim Jong-yong, chairman of the Financial Services Commission. He is the chief commander of the restructuring operation. Yet, he is in a bind. Ammunition is low, the target is ambiguous and the given order is to minimize casualties. He does not know where to point his feet.
If the situation is left as it is, the outcome is foreseeable. The shipping and shipbuilding industries will eventually wither when tax funding dries out. Even with feet going crazy, the hefty work of restructuring is not easy. But all we see are idle feet from government officials.
JoongAng Ilbo, May 19, Page 34
*The author is an editorial writer of the JoongAng Ilbo.