Last Three Weeks in Korea - Oct. 24, 2011

1. National

1) Nayeon Choi’s win marks 100^th LPGA win for Koreans

Korea’s Nayeon Choi won the LPGA Malaysia Tournament on Oct 16, her first win of the season, and the 100^th 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 2^nd and 3^rd 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 100^th 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 2^nd 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 8^th 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 http://www.seojin.com

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.

Regards,

H.S.