LTW - SK/NK Tensions, Naval Issues, FREE (trade) AT LAST

1. National

1) Tension grows between South and North Korea
Spring came, but it gets colder in Korean peninsula. Mad at scrawled threatening slogans of their new leader Kim Jung-un and his father Kim Jong-il in a South Korean army unit, North Korean TV aired footage of soldiers shooting at banners with slogans, “Let’s bet up traitor Lee Myungbak and South Korean military jingoists!” Some 150,000 people gathered in a square in Pyongyang, the largest crowed since the funeral of the late leader Kim Jong-il. The North Korean People’s Army also threatened “a sacred war to bury the traitors in this land.” South Korean minister of defense vowed South Korea would annihilate not only the origin of missiles fired, but also the areas supporting missile firing, meaning Pyongyang itself, if the nation is attacked. Mar 26 is the two year anniversary of a South Korean submarine sunk by North Korean torpedo, and South Korean and the U.S. forces are having a large scale exercise currently.

North Korea just announced it will launch a rocket in April to carry a satellite into orbit to mark the centenary of North Korea founder Kim Il-sung, Kim Jong-un’s grand father. So the remarkable tradition of Kim family’s flirting with fire works continues from 1945. Like grand father, like father, like son.

2) Groundbreaking of controversial naval base

Total of 112 simultaneous explosions ripped through the seashore of Ganjeong Village on Jeju Island, signaling the beginning of full-scale construction of a naval base that has become a flash point between the government and the opposition. The construction of the naval base about 130 acres of land at a cost of $869 million has faced extreme resistance from the opposition parties that say the base threatens the peace of Jeju, Korean Hawaii. The government says the base is needed to boost national defenses in the South Sea, especially in the event of possible sea conflict with China. 

Kim Ji-yoon, a member in left wing Unified Progressive Party, is widely criticized after she posted a tweet that described the naval base as a “pirate base.” If she is right, some 10 employees in Metaldyne Korea are former pirates, and some 100 employees from the army are former bandits. Being the leader of bunch of pirates and bandits, I am a Robin Hood.

2. Economy

1) Korea-U.S. FTA takes effect finally
It took 4 years and 10 months before the Korea-U.S. FTA officially goes into effect at midnight on Mar 15. Tariffs will be removed immediately on 9,061 products of 80.5% of U.S. imports to Korea, and 8,628 products of 82.1% of Korean exports to the U.S. Economists estimate Korea’s GDP will increase 5.7% over the next decade due to the FTA, and 350,000 jobs will be created. However, opposition party is still against the FTA. Han Myung-sook, the leader of opposition Democratic United Party, announced that her party will repeal the FTA if they win the general lawmaker election in April, and the presidential election in December. An irony is that Han had said “FTA with the U.S. is the right way to go” when she was the prime minister in 2007 under late president Roh Moo-hyun whose government initiated FTA negotiations. Han was probably not happy that the FTA went into effect by the government ruled by her rival party.

What’s wrong with Korean women these days? A young lady who calls navy of her nation “pirates, an opposition party leader who has two mouths that tell conflicting stories, and my wife who has to stare at her mirror for two hours before one hour church service…….

3. Auto Industry

1) Return of Mitsubishi to Korea

I talked about Hyundai’s 2nd attempt into Japanese market two weeks ago. Now it is Mitsubishi’s turn as it signed a partnership with CXC Motors to sell its models in Korea. Mitsubishi also unveiled its RVR model at the Kintex center, for the first time, as well as Lancer, Outlander, Pajero and L200 pickup. “Korea is a fast-growing market, and I believe it will be a good opportunity for us,” said MMC president Osamu Masuko. Cho Hyun-ho, chairman of CXC, said the company wants to become the most recognized and best-selling foreign brand in Korea, as well as the automaker with the highest customer satisfaction. CXC has opened two dealers in Seoul, and plans to sell 900 units this year.

 

Though 7 million vehicles a year Hyundai can now laugh at 1.14 million Mitsubishi, Mitsubishi had been a big guru to Hyundai until 90’s. Mitsubishi provided engine and transmission technology, and dispatched a number of engineers to Hyundai. The most known Mitsubishi engineer was Arai san who brainwashed Hyundai engineers with his doctrine on manufacturing engineering, production and quality. For example, when a problem occurs, he put drew a 1m diameter circle and told Hyundai engineers to stay in the circle to watch the manufacturing process until the root causes are found. No toilet trip was allowed as it was part of punishment. Today’s Hyundai would not have been possible without Arai San who was also a play boy. Ask any Hyundai employee if he knows Arai san. If the answer is yes, he must have been in Hyundai for long time as Arai san left Hyundai in the late 80’s and is now flirting with Goddess in the heaven.



Regards,


H.S.

Last Two Weeks - Defector Tension, Mr. Choe Beats Hyundai, & Fewer Divorces

1. National

1) High tension between Seoul and Beijing over defectors

There are as between 50,000 to 100,000 North Koreans roaming in China. Tension is growing between Seoul and Beijing over the impending repatriation of dozens of North Koreans defectors. Fearing that they will be persecuted once sent to North Korea, South Korean government asked China not to deport the defectors. A strong supporter of Kim Jong-un, China rejected Seoul’s request, saying the North Koreans crossed the border for economic reasons. South Korea is pleading to U.N. and international communities to give pressure to China. Some 3,000 North Korean defectors have reached South Korea annually over the past five years, 2,737 last year.

Not sure why Hu Jintao is so eager to send the defectors back to North Korea despite international humanitarian protests? Is Hu afraid the 100,000 defectors might be a threat to China’s family plan, too many to 1.4 billion people China have?

2) An American Kimchi Fighter a star to Koreans

Hines Ward in Pittsburgh Steelers is a hero to Koreans because his mother is a Korean. So it was another hero born when Ben Henderson became the new lightweight champion in the Ultimate Fighting Championship (UFC) after unanimous decision victory over Franke Edgar in Saitama, Japan last Sunday. Henderson wore a T-Shirt emblazoned with the Korean flag on its right shoulder, and U.S. star spangled banner on the left. A tattoo on his left arm showed his name in Korean alphabet. His mother met his father while she was working on the bus commuting to and from the DMZ, and married him 1980. Henderson was born in the U.S. in 1983, but had a Korean style
upbringing, which included learning Korean language, eating Kimchi, and practicing taekwondo.

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Koreans are physically less blessed than European and African Americans because of shorter legs. Just look at me. No Korean has won a medal in track & field in the Olympics, and a lousy high school basketball team in Detroit might beat Korean national team. International marriage with Americans might be encouraged as a solution for Koreans to succeed in the sports that
Koreans will never ever do well otherwise.

2. Economy

1) Divorce rate slows down

According to a report by Statistics Korea, there were 114,300 divorces last year, down 2.2% on-year and the lowest since 1997. The figure peaked at 166,600 in 2003, and stayed around 120,000 ever since. Experts think the “divorce deliberation” law enforced in 2008 was one of the main reasons for the divorce drop. The “divorce deliberation” law is designed to prevent the impulse divorces by mandating the couples filing for divorce to come  back to the court after three months. As per the marriage, there were 320,910 cases, the most in four years, reflecting better economy after Lehman Brothers.

I had the worst marital crisis in Nov 1989, just six months after marriage. My wife complained the humidifier I bought was too small, which I though was adequate, and it somehow flared up to an all-out war. My wife attacked me like Elin Nordegren, Tiger Wood’s wife, and I was Kimchi Fighter Ben Henderson. We finally made up for peace, but the ultimate victim was the poor broken humidifier that got thrown out the window in the middle of the fight.

2) An outsource worker wins against Hyundai in Supreme Court

The Supreme Court ruled in favor of Mr.Choe, who had been an irregular worker of an in-house subcontractor of Hyundai Motor. Choe filed a lawsuit against Hyundai in Aug 2006 after being “unfairly” fired after requesting the company make him a regular worker. The court said Choe had been working as an irregular worker of the subcontractor for more than two years for Hyundai, and thus should have been made a direct employee to Korea’s law that allows dispatched workers to be directly employed by the company if they have worked there for more than two years. While Hyundai said it respects the ruling, analysts think that it is impossible to turn all of its 8,000 irregular workers, which make up 20% of the total employees, into regular workers.

Union leaders have criticized companies of creating more irregular workers. Let’s see. An entrepreneur built a new plant in 2004. He had two choices in hiring. Hiring regular employees could guarantee better quality and less employee turnover, but it would cause all the union headaches that he had witnessed for many years in other companies. Hiring irregular workers would mean less quality or productivity, but he would not worry about all the nonsense from the union. He finally made a decision to hire irregular workers, and thus blamed as the villain who created irregular workers. Who is the real villain?

3. Auto Industry

1) Another poke at Japanese market

Hyundai has been successful anywhere in the world but Japan. Hyundai established Hyundai Motor Japan in 2000, and sold Santafe, Elantra and Sonata as well as Azera. Japanese customers were not impressed with Hyundai, though, and Hyundai had to pull out of Japan in 2009 in tears, selling only 15,000 vehicles in 10 years. Hyundai thought the pullout was a big damage to its pride, and is giving another shot at it. Cradle, a Japanese auto importer, announced that it will sell Hyundai’s i40 wagon through its 130 dealerships in Japan from April. The i40 sold only 1,840 units in Korean from its debut in September last year, but sold 11,895 units in Europe. An auto analyst said “Hyundai can take advantage of high Yen as the tool to re-enter the Japanese market.”

Japanese market is very tough to crack open, with total import models taking only 8% of the market. A Korean proverb says ‘No tree can stand after ten ax strokes.’ Hyundai might fail again even with Cradle dealers, but there are another 8 ax stokes to go before Hyundai finally says Sayonara Japan.

Regards,

H.S