Presidential hopefuls decry Kumho deal

Korea’s presidential hopefuls are protesting the sale of Kumho Tire to Chinese firm Doublestar.

Minjoo Party candidate Moon Jae-in cited the need to protect jobs at the tire company.

“The Jeolla province people are perplexed in watching the Kumho Tire situation, which is a local business,” Moon wrote on his Facebook page on Monday. “We have to protect the lives of 3,800 workers,” he said. “Kumho Tire sales shouldn’t be simply judged by figures.”

His party rivals and presidential candidate Ahn Hee-jung shared similar views.

“A rebidding should be in consideration as there have been problems in the process and the failure to not consider the special situation of a defense company,” Ahn said. “When considering the guaranteeing of long-term employment, facility investment and research as well as the influence on the regional economy, I don’t think Doublestar, which has been selected as the primary negotiator [on the Kumho Tire bid] is appropriate.”

Kumho Tire is currently categorized as a defense contractor as it supplies tires for the Korean military. For the Chinese tire company Doublestar to acquire Kumho Tire it needs the Korean government’s approval.

People’s Party presidential candidate Sohn Hak-kyu also expressed his opposition of the sale to Doublestar.

In January, Kumho’s main creditor Korea Development Bank (KDB), signed a deal to sell 42.01 percent of Kumho Tire’s stake to Doublestar for 955 billion won ($830 billion).

However, there have been concerns that the investor may sneak out technology from the Korean tire company and fail to meet its agreements on investing in the company and guaranteeing jobs, a situation that occurred with automotive company Ssangyong Motor.

Kumho Tire currently outranks China’s Doublestar. By global market share Kumho Tire ranks 14th while Doublestar ranks 30th.

Kumho Tire’s revenue as of the third quarter last year amounted to 2.16 trillion won while Doublestar’s is 638 billion won. Kumho Tire also has a larger operating profit.

Kumho Asiana Group Chairman Park Sam-koo has been trying to repurchase Kumho Tire and has been trying to form a consortium to get the financing. However, the creditor has disapproved the formation of the consortium on the grounds that Park’s right to purchase Kumho Tire against the bidder was limited to him only.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]