Kumho, union fail to reach dealA group of Kumho Tire employees without union membership agreed to the foreign acquisition of the money-losing tiremaker on Monday, contrasting the labor union’s stance against the proposed takeover by China’s Doublestar.
The group, consisting of some 1,500 non-union workers, said that the top priority is to survive and the acquisition, proposed by main creditor Korea Development Bank (KDB), is a better option than court receivership.
In an internal survey, 97.3 percent of the workers gave the nod to the potential deal. The main creditor asked Kumho Tire to reach an agreement on the proposal by March 30, an ultimatum that could lead to court receivership if not met.
“If [Kumho] files court receivership, the company will be blocked from normal business operation and face a liquidity crisis,” a statement released by the non-unionized group said.
“The sale to a foreign company might not be the best solution, but it is the second best at a time when we have no better alternative,” it said.
The decision will likely carry weight with the Korea Development Bank as it is in talks to reach a consensus on the sale to the Chinese tiremaker.
However, the head of the state-run creditor bank and representatives of Kumho Tire’s union failed to find agreement. During the 90-minute meeting with Lee Dong-gull, CEO and chairman of the Korea Development Bank, the union repeated its opposition to the planned sell-off.
The union said it will launch a four-day partial strike on Tuesday and start a full strike on Saturday.
“The labor union and creditor group concur on the current situation of the business deterioration of Kumho Tire, but the two sides confirmed there is a wide difference on how to resolve this matter,” the union said after the meeting.
The fate of Kumho Tire was thrown into uncertainty after a deal to sell a majority stake in the tiremaker to the Chinese company collapsed last September over price differences and other issues.
Earlier this month, the KDB said it will try again to sell Kumho Tire to Qingdao Doublestar.
The KDB called on the union to decide on whether to accept the Chinese company’s investment proposals by the end of March.
If the union refuses to accept the offer, the tiremaker will have to be placed under a court receivership, the bank said.
BY PARK EUN-JEE, YONHAP [email@example.com]
More in Industry
Work at home is not as easy as it sounds, ministry says
[NEWS IN FOCUS] Spotify is still almost here, and seems to be getting closer
Korea Inc. calls on Suga to relax border restrictions
House-bound consumers awaken a sleeping industry