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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

Kumho Tire halts production due to strike

  • PUBLISHED :February 13, 2017 - 13:48
  • UPDATED :February 13, 2017 - 14:08
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[THE INVESTOR] Kumho Tire has halted part of its production for two days at its plants in Korea as the labor union staged a partial walkout in a dispute over wages, the company said on Feb. 13.

“On Feb. 12-13, the employees temporarily halted operations. We plan to resume production on Feb. 14,” Kumho Tire said. The union workers from Gwangju, Gokseong and Pyeongtaek plants participated in the walkout. 




Wage negotiations have been ongoing between Kumho Tire management and the union since June, holding 22 rounds of talks. But they failed to narrow their differences.

The union is demanding a 5.16 percent wage hike, along with performance bonus payment for 2015 and 2016, as well as job security of all employees after the planned acquisition deal.

The company proposed a 1 percent wage hike, while not paying performance bonus for 2015 as the company suffered an operating loss. The management said it will provide bonus for 2016 based on the year-end earnings result.

The walkout at South Korea’s second largest tire maker occurred amid the ongoing sale of Kumho Tire.

Chinese tire maker Qingdao Doublestar has been chosen as the preferred bidder to acquire a controlling 42 percent stake in Kumho Tire.

Creditors of Kumho Tire and Doublestar are planning to sign the stock purchase agreement by the end of this month, its main creditor Korea Development Bank said last week.

However, Kumho Asiana Group Chairman Park Sam-koo can preempt the sale as he holds the first right of refusal in the sell-off. Once the price is set, Park can repurchase Kumho Tire by paying more than Doublestar’s offer.

Park has secured enough cash of 1 trillion won (US$869.35 million) to acquire Kumho Tire, according to Kumho Group last week, raising the likelihood of Park reclaiming the tire-making arm to speed up rebuilding his family-controlled conglomerate that was torn apart amid the liquidity crisis in 2010.

By Ahn Sung-mi (sahn@heraldcorp.com)

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