Kumho Tire goes to court to free up bank account

Kumho Tire recently asked Gwangju’s high court to suspend a provisional attachment of one of its accounts so it can make payments to suppliers.

One of Kumho Tire’s accounts was attached on July 30 by a Gwangju court in a civil suit by a labor union representing contract workers for the company's contractors.

In January, some 600 workers sued Kumho Tire for not upgrading them into full-time workers directly employed by the company. The Gwangju District Court ruled for the plaintiffs, saying that workers seconded to Kumho Tire for more than two years should be made into salaried workers and that the company should show their intention of offering direct employment to other workers as well.

At the time, the local court ordered Kumho Tire to pay 25 billion won ($21.1 million) in wage differentials plus interest to the plaintiffs. Kumho Tire appealed, claiming that similar cases involving other companies in the industry got different rulings in the past.

Kumho Tire said Tuesday that it plans to put up a bond with the court for the settlement in order to free up its account and make payments to suppliers.

The company said it will consider converting the contract workers into regular workers after the appeals court’s final decision.

Kumho Tire, which is 45 percent owned by China-based Doublestar, managed to turn to profit in the second quarter of 2019 after recording 10 consecutive quarters of losses.

This year, however, with the impact of the coronavirus, the tire company is in the red again.

Its sales in the first half of the year were 956.2 billion won, an 18 percent year-on-year drop. Its operating loss in the first half of this year came to 53.8 billion won, a 37 percent increase from a year earlier.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]