Monday, December 19, 2011

The Last Two Weeks in Korea (December 19,2011)

1) A Korean coast guard killed by Chinese fisherman
Cpl.Lee Cheong-ho, 41, a member of a Coast Guard SWAT Team, was stabbed to death by a Chinese fisherman in Yellow Sea. The SWAT team was in apprehension operation to seize an illegal Chinese fishing boat in Korean territory, and Lee got stabbed in the stomach by the captain of the boat. Cpl. Lee is leaving behind his wife and three kids. The captain and seven other fishermen were arrested on charges of murder. With mounting public anger against the Chinese fishermen, the Chinese government officially expressed regret over the killing. With fish not sufficient in the Chinese coast in Yellow Sea, mostly due to pollution, Chinese fishermen are tempted to throw nets in Korean sea.

The Chinese fishermen used to venture into North Korean waters frequently, but not any longer after two of them got killed by North Korean patrol boats a while ago. Probably one of few things Kim Jongil gets credit as you get picked on permanently unless you show your muscle.

2) Tension with Japan escalates after 1000th ‘Comfort Women’ protest
A statue of a ‘comfort woman’ forced into sexual slavery during WWII was set up to mark the 1,000th protest in front of the Japanese Embassy in Seoul. The first protest took place on Jan 8, 1992, and the comfort women have held protests every Wednesday since then. In March 2002, when the 500th demonstration was held, the Guinness Book of World Records put it as the longest regular protest of a specific issue. As many as 200,000 comfort women were sent to China, and 80% of them were Koreans. As time goes on, there are only 65 survivors, mostly 83 to 93 years old. The comfort women are demanding official apology, and full compensation from the Japanese government.  President Lee Myungbak met with Japanese PM Mr.Noda over this issue over the weekend. Mr.Noda asked the statue be removed, but Lee retorted that there can be the 2nd or the 3rd statue if the Japanese government keeps ears closed to the voices of the comfort women.

The rationale from the Japanese government is that Japanese government made a comprehensive compensation for its colonial rule over Korea by giving U$500 million to South Korea in 1965, and thus no more apologies or compensation is required. A little problem with that rationale is that the ‘comfort woman’ issue did not come up in 1965, as most of the comfort women were too ashamed to speak out for what they did. It would be very hard for a woman to say publically ‘I had given physical entertainment to thousands of Japanese soldiers.’

2. Economy
1) Good news for economy with a former Miss Korea’s scandal with her boyfriend?
Lots of voyeurism in Korea as Mr.Huh, a Taiwanese-American, put on his homepage the video clips of his private bed room activity with Ms.Han, a Miss Korea and anchor woman. They once lived together, but with the relationship going sour, Mr.Huh decided to release the video as a revenge for getting nearly beaten to death by gangsters hired by Ms.Han in March.  No comments yet from Ms.Han at this time. This is the third time a celebrity’s personal hardcore video was released to the public. First, it was Ms.Oh, an actress whose video went wild fire through diskettes in 1998, and it triggered home computer boom in Korea. The second was Ms.Baek, a singer, whose graphic scenes in 2000 spread around via internet, thus advancing home high speed LAN by 10 years. The latest Ms.Han’s video is floating around mostly in smart phones, so Samsung and Apple are in big smiles.

The ultimate victim from Ms.Han’s scandal was not Ms.Han herself, but the average Korean husbands. The video showed the greatness of the Taiwanese guy’s, and Korean wives keep comparing with their husbands’.

2) Korea in dilemma over Iran
What if my friend’s enemy is my friend? Korea reluctantly joined U.S. efforts for sanctions against Iran by adding more than 100 Iranian groups and individuals to its financial blacklist and cautioning local firms against purchasing Iranian petro products. With the stricter measure, the organizations and individuals will now have to receive approval from the Bank of Korea before making any foreign currency transactions.  The dilemma is, while Korea is a blood ally with the U.S., Korea has to rely on Iran nearly 10% of total oil imports.

Korea has traditionally been a good friend to Iran, even after Mr. Alphabet became the leader of Iran. The busiest street in Seoul stretching from Renaissance Hotel to Intercontinental Hotel is called “Teheran Street” after Seoul and Teheran made a sister city relationship in 1979, and many Korean companies, including auto makers, have strengthened their business relationship with Iranian partners.. There was no bloody past between the two countries to boot, thus no need to squabble over a statue.

3. Auto Industry
1) Hyundai beats Samsung in profits for the first time
Hyundai and Samsung have been perennial rivals for #1 in Korea for decades, and it was always Samsung with the most profit. It may change this year as Hyundai is expected to reap 18.05 trillion won(U$15.52 billion) in net profit in 2011, while Samsung will trail with 17.75 trillion won. Hyundai’s growth came from hot sales of Hyundai and Kia models after Tsunami in Japan in March, and Samsung’s fall was due to the poor performance of flagship company Samsung Electronics’ LCD business. While Hyundai trounced Samsung in profit, many analysts think Samsung is still the top as its total revenue would be more than Hyundai’s in 2011, and will retake #1 position in 2012 with the high sales of smart phones.

I have a personal vendetta against Samsung.  I applied for Samsung internship along with twenty of my classmates in senior year in 1986. All of my friends got the admission, but not me. For some reason, Samsung singled me out as a reject and I ended up with Hyundai Motor after senior year. I am thinking to release my secret personal video clips against Samsung;  My living room with Sony TV, LG refrigerator, Electrolux vacuum cleaner, Apple cell phone, but no Samsung whatsoever……


Monday, November 21, 2011

Last two weeks in Korea (Nov 21, 2011)

1. National
1) Jeju Island chosen as one of world’s 7 wonders
After a yearlong campaign, Jeju Island, Korea’s Hawaii, was named one of the new 7 wonders of the natural world by New7Wonders Foundation. Other winners were the Amazon Forest, Halong Bay in Vietnam, Iguazu Falls, Komodo National Park, Puerto Princesa Underground River in Philippines, and Table Mountain in South Africa. There were 28 finalists including Grand Canyon and Dead Sea.  Located 80km from southern tip of Korean peninsula, Jeju has land size of 1,848 square kilometers with 577,187 people. The Jeju Development Institute expects that there will be an increase of 73.6% in foreign tourists and 8.5% in Korean tourists with the recognition as one of 7 natural wonders. 
The nomination by the New7wonders Foundation was somewhat controversial as the organization decided the winners from votes by internet and phone calls without restricting duplication. A person with lots of time to waste, and money to pay for phone calls could vote for Jeju 1 million times if he or she wanted. Thank God for Jeju governor not contacting my wife for her support.
2. Economy
1) Kim Jongil not happy with cookies to North Korean workers concerns
Kaeseong Industrial Complex is located north of DMZ where many South Korean companies have plants. Choco Pies, the chocolate-covered, marshmallow cake, are given to North Korean workers as snacks. A trouble occurred as some of the workers smuggle them outside the industrial zone and sell them in the black market. So popular among the North Koreans, the pies are viewed as dangerous symbols of capitalism by the North Korean authorities. Pyongyang demanded that South Korean companies stop giving out Choco Pies, and give cash to the workers instead.  The South Korean companies had a meeting over this issue, but failed to reach an agreement over how many Choco Pies each company can give to their North Korean employees.  
I had similar experience. Only super rich could afford to enjoy bananas in 1982 as the import of banana was banned to protect Korean farmers. I joined the army to work in the U.S. army base in Seoul at that time, and found that rare bananas were given at each meal. I saved my share of bananas in the locker, and took them out for my brother and sister over the weekend. Time has passed, and anyone can import bananas as many as they want. Even Korean monkeys go on hunger strike when they are given bananas.

2) Work shift pattern may change?
Most of the plants in Korean auto industry run two shifts. With one hour each for lunch and dinner, it is 8:00am to 8:00pm for day shift, and 8:00pm to 8:00am the following day for the night shift. Companies can benefit as they can run close to 24 hours, with one third less employees than 8 hour three shifts practiced in other countries. Employees were O.K too as they can work higher paying overtime. Things can change as GM Korea announced that they will have three shifts operation so that employee can have more time for rest. The government said they will demand Hyundai/Kia do the same thing for more job creation and employee health.

GM Korea plans to do what works best in the nation its headquarter is located, without knowing the impact it will have on Korean OEMs or suppliers. When Hyundai opened its Bromont plant near Montreal in 1988, Hyundai gave free meals to its employees to follow the practice in Korea. The Canadian employees were so much happy, but other companies in Bromont were not, as they suddenly turned into a Scrooge compared to Hyundai. Hyundai had to change its policy, and began to charge $3.5 to the employees. The above pictures are Hyundai Bromont plant that is now closed.   
3. Auto Industry
1) Renault-Samsung gets a blue eye by golf bags
As most of golf courses are located outside Seoul in two hours drive range, the golfers tend to meet at a location and ride together in one car with all of their golf bags in the trunk. So it is very important that the trunk has to be big enough to hold minimum 4 golf bags as it has to be always four people to make one team. SK Encar, a used car dealer set up by SK Group, thus checked the size of 30 mid-size sedans sold in Korea, and said Renault Samsung’s top of the line SM7 and its smaller sister SM5 are no good for golfers as they could not take only three, not four golf bags. These two were the only local models that could not take four bags. Chrysler PT Cruiser was the worst as it could hold only 2 bags, while Ford’s new Taurus was the biggest with 5 bags.
SM 5 and SM 7 are designed by Renault-Nissan engineers who probably have small understanding of Korean way of thinking.  Another example is with North American cars in Korea.  Korea is small in land, and the parking lot is only 2.3m wide.  You park two 1,936mm wide Taurus side by side, and you have to wiggle out of the Taurus with doors only 15 centimeter open. (Sonata is 101mm narrower with 1835mm width.) Obama’s rhetoric wouldn’t help U.S cars sell better in Korea. It is American designer’s better understanding of Korean customs and realities.
2) Hyundai joins hands with GM over hydrogen fuel cell vehicle
According to local Herald Economy magazine, GM has signed a memorandum of understanding with Hyundai over joint development of future vehicles. A high ranking GM official said “GM’s top management has visited Hyundai headquarter in Seoul and R&D facility in Namyang last August, and proposed joint development if hydrogen fuel cell electric vehicle.”  A Hyundai official said Hyundai was positive to this proposal, thinking that it was a great accomplishment already to be proposed by a giant who spends 10 times more R&D money than Hyundai does. He said Hyundai Chairman Chung Mongkoo told his management to take a positive look at the GM proposal, and that official announcement can be made late this year or early next year.  Hyundai has supplied Seoul city with 19 Mohave and 14 Tucson models powered by hydrogen fuel cells.
Koreans call it “gemucee” to describe something big, powerful, and reliable, like gemucee refrigerator or gemucee Mike Tyson. Gemucee is how Koreans pronounce GMC, and this dates back to 1950s when Koreans were wowed by the performance of GMC military trucks during the Korean War. Koreans had only driven Japanese made vehicles run by charcoal until Gemucee trucks showed up in Korea. My brother in Hyundai probably hopes the latest joint development can result in Gemucee 2 that can wow the consumers all over the world this time.


Monday, November 7, 2011

Last two weeks in Korea (Nov 7, 2011)

1) Police chief urges lethal weapon on mafia gangsters
Angered by timid police response to quell sword wielding vicious fights between two rival mafia gangs in Inchon, Cho Hyunoh, the commissioner of the National Police Agency, declared war on organized crime rings, and permitted police to fire guns if necessary. While the police can carry guns, there have been strict and cumbersome rules to follow before firing actual bullets.  Asked about the possible human rights abuse with the quick use of guns, Cho said “no need for human rights for gangsters.” You can not tell mafia gangsters by normal appearance in Korea, but it will be much easier if they go naked as most of them have tattoos like below.
 I was in serious jeopardy on May 2, 1989, in Canada. A police man pulled me over when I drove fast not to miss the plane from Dorval Airport in Montreal for my marriage in Korea on May 5th.  I did exactly what I would do in Korea.  I opened the door and got out of my car, to explain the police man why I had to drive fast. Then, I put my right hand inside my jacket, just to take out my driver’s license from the pocket.  I had to learn hard way what “freeze” means on that day.

2) Inchon Airport gets the best airport award
Inchon International Airport was named on the inaugural “Roll of Excellence” by the Airports Council International, a federation of over 1,700 airports around the world. Inchon Airport received the praise after having been chosen as the world’s best airport for six consecutive years from 2006. The “roll of Excellence” was established this year, and airports that consistently made it to the top five for five years straight are eligible.
Inchon Airport is the best. Then what is the worst? It is O’Hare Airport in Chicago from my personal experience. I made a visit to the U.S thru O’Hare Airport last April, and it took me 1 hour and 10 minutes to pass the immigration due to long line, especially for foreigners. I returned to Korea a week later, and checked how long for immigration process at Inchon Airport. Just 2 minutes!  Because I was a Korean? It was 1 minute and 30 seconds for the foreigner who was in the same flight with me. O’Hare Airport can sue me any time if I added even a minute.

2. Economy
1) Korea-US FTA bill still under opposition
The FTA bill is going nowhere as the opposition party is now proposing to put it on the national referendum. The opposition Democratic Party Chairman, Sohn Hakkyu, took it to the streets handing out leaflets to build support for blocking the Korea-U.S. FTA. The Democratic Party is insisting that the ISD(Investor-State Dispute Settlement) provision in the bill has toxin inside against Korea, and is demanding the government to re-re-negotiate with the U.S. which already signed the bill. With the ruling Grand National Party showing reluctance to pass the bill in fear of ugly physical fight against DP lawmakers, and with the DP taking it as part of their strategy for the presidential election next year, it seems it may take a while for the bill to pass the National Assembly.
I’m in dilemma. Sohn Hakkyu was the governor of Gyeonggi province, and came to Metaldyne Korea at the grand opening ceremony in 2005. He belonged to Grand National Party at that time, and was a strong advocate of FTA with the U.S.  He then defected to Democratic Party in 2007 when he was losing presidential party nomination to current president Lee Myungbak. Sohn now plans to run for presidential election again next year as the leader of Taliban against the FTA. Should I vote for him or not?  Many millions of Koreans have the same dilemma as they also once thought Sohn could be the best leader in the nation.

3. Auto Industry
Hyundai-Kia Chairman Chung Mongku met with the Chinese officials from Yancheng city, and signed a contract to build Kia’s third plant with an annual capacity of 300,000 units in the city where Kia’s two existing plants are located.  The groundbreaking will take place at the end of 2012 for completion in 2014. Kia official said the third plant is need to catch up with fast growing Chinese market,  which rose to 11.12 million vehicles last year, up 34% from 2009.Once Kia’s third plant is completed, Hyundai-Kia will have capacity of 1.73 million units in China, 200,000 more than 1.53 million capacity in Hyundai’s main Ulsan plant in Korea
The tall man in dark suit next to Chairman Chung is Mr.Seol, a Chinese born in Korea. One of seven vice chairmen under Chairman Chung, Mr.Seol has been the main man for Hyundai’s China project since early 2000, and has done a pretty good job with all the success stories in China. A living proof of “no quanxi, no business “in China.

2) Hyundai union selects new leader more militant
While Mr.Chung was upbeat at the signing ceremony for Kia’s 3rd plant, he was probably much stressed out at the bad news over the weekend. One of the main reasons Hyundai was successful last three years was from the union leader who was reasonable enough to avoid perennial strikes in favor of practical benefits for union members. So no strike during his three year leadership.  This might change as Hyundai union members have selected Moon Yongmoon as the new leader for the next two years. Supported by infamous Korean Confederation of Trade Unions, a Korean version of UAW, Moon announced he will fight for the transfer of outsource workers to regular employee status, for the repeal of time-off system, and for two 8 hour consecutive shifts that will eliminate mid night working. All the bad stuffs that will give a direct impact to Hyundai’s profitability.
With Mr.Moon as the new union leader, Hyundai will face the reality again in which average three weeks a year can be wasted with strikes, much like what had been going on every year prior to three years ago. Many people in Hyundai management thus pray in despair that Mr.Moon somehow turn into another Sohn Hakkyu in Democratic Party, the master in about face.


Monday, October 24, 2011

Last Three Weeks in Korea - Oct. 24, 2011

1) Nayeon Choi’s win marks 100th LPGA win for Koreans
Korea’s Nayeon Choi won the LPGA Malaysia Tournament on Oct 16, her first win of the season, and the 100th for Korean female golfers, after beating Taiwan’s Yani Tseng by a stroke. The first LPGA win was by Okhee Ku who won the Standard Register Turquoise Classic in 1988. The 2nd and 3rd was by Oksoon Koo who won LPGA Toray Open in Japan 1994 and 1995 straight. The flood started in 1998 when rookie Seri Park won four LPGA wins, including two majors, in one season. Other Korean girls that have contributed 100th win are Mihyun Kim and Jiaye Shin with 8 wins each, Grace Park and Heewon Han with 6 wins, and Nayeon Choi with 5 wins.

Korean male golfers are humbled when compared to Korean girls in LPGA as K.J Choi and Y.E Yang are the only Korean PGA winners, totaling ten wins, 8 with K.J Choi and 2 with Y.E Yang. However, Korean males gave more impact to golf fans. Loot at Y.E. Yang with his dramatic 2009 PGA Championship win against Tiger Woods. So much exhausted from the stress of defeat, Tiger Woods hasn’t won any PGA tournament since then.  Impressed at Y.E Yang’s performance in 2009, Tiger’s wife Elin Nordegren took a private lesson from Yang on how to putt better.    

2) U.S. soldiers in Korea under curfew
A 21 year old U.S. Army private was arrested on charges of raping a girl in a dormitory in Dongducheon, a home town of 2nd Division right south of DMZ. Just a few days later, another private, also 21, was booked on charges of entering a dormitory room in Seoul, raping an 18 year old girl, and stealing her laptop. Korean government expressed its concern over sex crimes committed by U.S. soldiers.  Fearing the repeat of Okinawa rape by a G.I. in Japan in 1995, and the wild protest in Seoul in 2002 over the death of two Korean girls by a U.S. military tank, Eighth U.S. Army Commander John Johnson put a 30 day curfew for all USFK personnel living in barracks across Koreas, including Pyeongtaek. Mr.Johnson personally went on a curfew patrol in Seoul’s Itaewon at 2:00am last Saturday.
Guess what is the busiest day for a clinic in the U.S. Army in Korea.  Monday?  Wrong.  It is Wednesday from my experience as a medic in the 8th U.S. Army from 1982 to 1984. After hard week days, the virile young soldiers go out to Itaewon for fun over the weekend. The symptoms tend to show up after three days.

2. Economy
1) Korean lawmakers still hung up on FTA ratification with U.S.
While U.S. Congress passed Korea-U.S. FTA after Korean president Lee Myungbak’s visit to Capitol Hill and GM plant in Detroit, Korean National Assembly is still dithering due to objection from the opposition Democratic Party who is refusing to cooperate with the bill’s passage unless the government come up with compensation package for farmers, fishermen and small company workers who will be negatively affected by increased import from the U.S.  The Democratic Party is even insisting re-re-negotiation of the FTA. Though the majority ruling Grand National Party can easily pass the FTA bill, they are not pushing hard enough out of fear of National Assembly turning into a Taekwondo showdown if they proceed without the consent from the minority Democratic Party who has threatened physical blocking of the voting process. The lawmakers in the two parties are still debating as of today. With over 70% of Koreans for the FTA , however, the bill will eventually pass by this month, to make Jan 1, 2012 as the effective date.
Obama has said the automobile trade is badly lopsided in favor of Korea as U.S. automobiles are selling only 0.5% in the Korean market while Korean cars take 9.2% market share in the U.S. That is wrong statement as the U.S. brand cars sell 9.4% in Korea. Are the Chevy Malibu and Cruze GM Korea manufactures ands sells in Korea in volume are some kind of bicycles ?

2) Restaurant owners protest high credit card fees
 Over 75,000 angry restaurant owners gathered in a sports complex in Seoul, demanding credit card companies to give them a break. They insisted that the card transaction fees should be lowered to 1.5% from the current rate of 2.5% to match the rates charged to other businesses such as department stores. There was a prediction that people would miss lunch on Seoul because of so many restaurant owners in the protest, but it did not take place as it was the owners, not cooks, who showed up. Politicians from both ruling party and opposition party came to support the owners, and to get more votes. Credit card companies gave in to the pressure by suggesting 1.8%, but insisted it is not possible to go to 1.5% level.
As the government gives income tax break to consumers for using credit cards, more consumers are swiping cards than paying cash even for a bowl of cheap noodles. This is double whammy to the restaurant owners.  They are paying 2.5% transaction fee to the credit card companies, and are losing chances to play with tax because of rare cash transaction. Good ole days gone……

3. Automotive
1) Seojin Industrial up for sale.
Tower Automotive is looking for candidates to sell Seojin Industrial it bought in 2004.  A maker of vehicle frames and body components since its foundation in 1966, Seojin Ind. had sales of 301 billion won ($260M) and EBITDA of 30.2 billion won($26M) in 2010. Seojin Ind. relies on Hyundai and Kia for 97% of its business, and has its 7 plants across Korea, but none overseas. Rothschild, the M&A firm for Seojin Ind., expects the sale price would be 150 billion won with 5 times of EBITDA. Interested to buy? Check

Seojin Ind. was part of Seojin Automotive Group that was a prime auto supplier group to Kia, more like Delphi to GM or Visteon to Ford, until Kia went bankruptcy in 1997. Seojin Group sold Seojin Ind. to Tower Automotive to raise cash for its two other remaining companies; Seojin Clutch and Seojin Cam.  Seojin Group also used the money from Tower to buy other companies like KOMOS (steering wheels), AIA(rubber products) and ECOPLASTIC(bumpers). Would Seojin Group show up at the bidding to buy back the company once belonged to them? Probably the same answer from my wife, asked if she would drop by Louis Vuitton during her shopping this Sunday.


Saturday, August 13, 2011

Last Two Weeks in Korea (August 8)

1) Seoul in under water
Put Beverly Hills in Manhattan, and it will make Gangnam, the district south of Han River in Seoul where Renaissance hotel is located. This affluent area turned into a disaster zone when it received 440mm (17.3 in) of rain on July 27, the most daily precipitation in Seoul since Aug 2, 1920. A total of 60 people were killed in landslides in Seoul and other parts of the country, and Gangnam turned into a Venice for a day.

While Korea gets hit by natural disasters from time to time, mostly by typhoons in the summer, its damage magnitudes are usually much smaller compared to other nations. The record flood in Gangnam last week was a baby pee, if the Katrina in New Orleans in 2005 was a Niagara Falls.

2. Economy
1) Samsung to drop its MRO business
Samsung announced that it will pull out of the MRO(Maintenance, Repair and Operations) business, finally yielding to Korean government’s pressure on large conglomerates. MRO companies are service providers that procure and oversee expendable goods like stationary and tools for corporations. Samsung is to sell 58.7% of iMarketKorea, held by nine Samsung companies. The government recently accused Korea’s family owned conglomerates to stifling competition and growth in the local MRO industry by giving preferential treatment to their affiliated MRO companies over others. President Lee Myungbak even stressed the need for shared and balanced growth between large conglomerates and small and medium sized enterprises. Many are waiting to see whether other conglomerates like Hyundai and LG will follow suit.

My wife is in dilemma over balanced growth. She has quite a few Hyundai stocks, but her husband is working for a small and medium sized enterprise supplying auto parts to Hyundai. If she keeps buying Hyundai stocks despite recent S&P downgrading of U.S. economy, I should suspect something goes on between she and Hyundai Chairman Chung.

2) More men living with their parents-in-law
According to a survey by Statistic Korea, more and more men live with their wife’s parents for economic reasons. Their number increased three times from 18,088 in 1990 to 53,675 in 20101. By contrast, the number of women living with their parents-in-law dropped more than half from 444,634 to 198,656 in 2010. The report reflects only cases where in-laws take responsibility for the livelihood of their family, including their sons or daughters-in-law. Childcare is one of the main reasons for the phenomenon as women feel more convenient to live in their own parents’ homes.Another key reason is that women now have more say in the family because they work. The number of wife breadwinners increased 1.5 times from 1.79 million in 1990 to 4.5 million last year.

Koreans traditionally had taken it a shame to live with wife’s parents as it meant you are a loser unable to feed your own family, and there is a Korean proverb that says “Don’t live in your wife’s parents home as long as you have three buckets of barley.”  With women power got so bigger these days in Korea, however, you sometimes have to live with your parents-in-law even if you have three buckets of gold bars, if your wife says so.

3. Auto Industry
1) Hyundai & Kia ranks 5th in the first half
Hyundai and Kia sold a combined 3.19 million units globally in the first six months this year, up 15.9% from the 2.75 million during the same period last year, the fastest growth rate among all the car makers. GM was the first with 4.64million, followed by VW (4.09 million) and Toyota (3.48 million).  Renault-Nissan sold 3.43 million units, just 140K units more than Hyundai and Kia. Ford ranked 6th after Hyundai/Kia with 2.4 million units

The banners flying all over in Hyundai in 1995 had a GT-10 logo inside, to encourage the employees to reach the goal of Global Top 10 car maker in 10 years in 2005.  Hyundai bought bankrupt Kia in 1998, and now became a GT-5. Quite an achievement for a company that had to import components from Ford U.K for the license assembly of a few thousand Cortina and Mark IV models 35 years ago when Hyundai was probably GT-30.

2) Hyundai to go green with hybrid
Hyundai Chairman Chung Mongkoo announced Hyundai will begin foregrounding its new hybrid models to strengthen its position in environmentally conscious U.S. market. Sales figures are bolstering Chung’s announcement. Hyundai Sonata Hybrid sold 1,780 units in the U.S. last month, up 20% from June to stay ahead of Honda Insight and Ford Fusion. Its sister Kia Optima Hybrid saw its sales go up 300 percent to 300 units last month. Hyundai is a few steps ahead in terms of its cars’ average fuel efficiency, which now stands at 35.7 miles gallon, 0.2 miles better than the U.S. standard set for 2016.

Hyundai has two hybrid engines. One is 2.4L Theta hybrid engine for Sonata and Optima sold in America, and the other is 2.0L Nu hybrid for the same models in Korean market. Not sure why Hyundai use different hybrid engines for the same models, but Hyundai engineers probably decided to put bigger engines for the U.S. market after they saw long lines in MacDonald and Burger King restaurants in the U.S. 


Wednesday, July 27, 2011

Last two weeks in Korea (Jul 25, 2011)

1. National
1) Japan bans its government official from using Korean Air
The Japanese foreign ministry requested its official not to use Korean Air for one month from July 18 to protest against Korean Air’s test fling of its new Airbus A380 last month over Dokdo(Takeshima to Japanese) located in East Sea (Sea of Japan). On June 17, Korean Air launched an Incheon-Tokyo route with the A380, and a day earlier conducted a two-hour test flight of the A380 carrying journalists from Inchon to over Dokdo. A Korean government official said “Dokdo is Korea’s territory historically, geographically and according to international law, and there is no problem flying our nation’s plane over our territory.” As Japanese diplomats usually ride Japanese airliners, the real impact from the “No Korean Air” measure is not expected to be significant.

The issue of who owns Dokdo(Takeshima) is very sensitive to both Koreans and Japanese, and is a major hurdle in their effort for better friendship. One peaceful solution would be a 12 round boxing match between Lee Myungbak and Kan Naoto. If Lee wins, Dokdo belongs to Korea permanently. If Lee gets knocked out, well, Dokdo still belongs to Korea…….

2) A high rise building rocks to Tae Bo
Thousands of people in the 39-story TechnoMart building in Seoul had to be evacuated for two days when upper 19 floors of the building shook up and down heavily for 10 minutes on July 5. It was a mystery as there was no earthquake, no shabby building construction, or any other suspect that could cause the building to vibrate so immensely. It was found out last week that 17 people exercising Tae Bo were the culprit. Investigator noticed that the vibrometer on the 38th floor suddenly started moving violently when a group of 23 recruited people for the simulation started jumping around in the fitness center on the 12th floor. Investigators said when the natural frequency of vibration of the building matched the frequency of Tae Bo jumping, it gave a big shock to the building because of phenomenon resonance.

The TechoMart was O.K because the vibration was from a few skinny people exercising Tae Bo. Could have been a disaster if it were a bunch of Japanese sumo wrestlers hopping and jumping in anger over Dokdo ownership.

2. Economy
1) Private school whistle blowers make a lot of money
The Ministry of Education said a 37 year old lady became the second-most paid “hagparazzi’, a portmanteau of hagwon(cram schools) and paparazzi to refer to those who report illegal hagwon activities. The Hagwon Law restricts hagwons from holding classes after mid-night and requires the cram schools to abide by the fees they have listed on the web sites of education.  The lady said she has accumulated over 200 million won ($188,600) during the past two years as a hagparazzi. Her golden method is simple. She conceals a hidden camera inside her bag, and she asks hagwon official specific questions to reveal their late-night programs and program fees. She then walks to the Ministry of Education to collect the prize. To produce more whistle blowers, the ministry recently launched classes on how hot become professional hagparazzi.

Obama has often publically praised Korean educational system as he thought it was the key to the miracle of Korean economy. Obama probably didn’t know about the price Koreans had to pay in this education system.  Many students have to leave home around 6:30am, and come home 2:00am the following day, after regular school and hagwon.  Many parents are spending about 30 to 40 percent of their income for their kids’ education. An example? The person writing this Korea update his second son in 2010 when the son was studying hard to enter a university in Korea.

3. Auto Industry
Police arrested 62 Hyundai workers in Ulsan plant over illegal multi-million dollar gambling on the internet during work hours.  There were 13 former and current labor union officials among the arrested. According to the police, the Ulsan workers repeatedly placed bets on illegal internet sports and horse racing games during office hours between Jan 2009 and May 2010, using computers in a staff lounge in the plant. The average amount gambled over the cited period came to 300 million won ($284,171), according to the arrest warrants. One of them placed as many as 700 bets during the period.

Who are the people working in a paradise? Unionized production worker in Hyundai and Kia.  They get a lot of wage, be the last to leave the company even if the company goes down the tube, work in production line that turned into a newspaper proof reading room. Free unlimited access to gambling devices, to boot.

2) JTEKT builds a bearing plant in Korea
JTEKT, a parent company of Koyo Bearings, is building a new bearing plant in Pyeongtaek with 17 million dollar (1.3 billion yen) investment for production launch in the fall of 2012.  JTEKT currently manufactures bearings in Tokushima and ship them to Korea for final assembly in the joint venture company with JICO, Korea’s largest water pump maker.  JTEKT’s Pyeongtaek plant will be competing against NSK Korea  which has been running a plant in Korea for many years. 

Here are a few reasons why JTEKT is building a plant in Korea. Commitment for localization with Hyundai.  Lower manufacturing cost. Korea’s FTA with EU that went effective from July 1. No earthquake, and etc.  The only concern JTEKT might have is the union officials who might turn Pyeongtak into a Las Vegas.