LTW - Mud Throwing, PGH Nomination, CEO Jail Term

1. National
1) Diplomatic mud throwing continues between Korea and Japan
It started with Korean President Lee Myungbak’s visit to Dokdo island, Takeshima to Japanese, on Aug 10 and Lee’s following comments that Japanese Emperor Akihito should apologize for the colonial rule of Korea if the emperor wants to make visit to Korea. The Japanese government made a threat of canceling currency swap with Korea, and its Prime Minister Noda sent a diplomatic letter to Lee Myungbak, proposing to take the Dokdo issue to the International Court of Justice. Refusing to receive the letter, Lee Myungbak basically replied to Noda “Kiss my butt” by throwing the letter back to Japanese Foreign Ministry. Korean Marine Corps is planning a military exercise around Dokdo early September. North Korea also joined South Korea to condemn the Japanese government.

  

Mr.Noda must be in dilemma. While he is talking about bringing Dokdo issue to ICJ, he has to say what Lee Myungbak is saying to him to Hu Jintao over Senkaku (Diaoyudao by Chinese) islands which China intends to take to ICJ for the same reason Japan has with Dokdo. Noda is much like my wife; Raise hell about my new 35,000won ($33) soccer shoes, but keep mute about her 1 million won Prada handbag.

2) Park GeunHye nominated as presidential candidate for ruling party
Park GeunHye has been nominated as the presidential candidate for the ruling Saenuri Party. This is the first time a major party has put a woman as its candidate. Park, who lost the nomination to Lee Myungbak 5 years ago, might be the 2nd president in her family after his late father Park ChungHee if she wins in December against the candidate from the opposition Democratic United Party or the popular independent Ahn CheolSoo who has not yet declared his bid for presidency.

  

Park had to play the first lady when her mother got shot to death by a North Korean agent in 1974, and became an orphan when her father got assassinated by his own KCIA director in 1979. Park turned into a politician in 1998 after being elected as a lawmaker. Most of her popularity comes from those who still admire her father’s contribution to the nation. Her father transformed Korea economically from handicap 30 HyungSik Yoon to K.J. Choi during his presidency from 1961 to 1979.

2. Economy
1) Samsung lose to Apple in the U.S. patent court
Samsung means Three Stars, and it might be losing one of its stars as California court jury ruled that Samsung infringed on six of seven patents for Apple’s smart phones, awarding Apple $1.05 billion in damages. Adding insult to injury, the jury found no infringement by Apple on any of Samsung’s utility patents. The $1.05 billion is about one-fourteenth of Samsung’s operating profit last year. While Apple CEO Tim Cook praised the ruling as “An important day for Apple,” Samsung argued that the decision will hurt U.S. consumers. Samsung is certain to appeal the ruling.

 Samsung recently ordered its office employees to begin work at 6:00am in a campaign to make Samsung more competitive. With the California ruling last week, they probably now have to arrive at the office at 3:00am. There will be a lot of stars to pick in the sky around that time.

2) Hanwha Group Chairman put in jail for financial crimes
Kim SeungYoun, the CEO of Korea’s 10th largest Hanwha Group, was jailed for four years for causing 302 billion won in losses to his conglomerate and evading 1.5 billion won in taxes. Kim is the first head of a major conglomerate to be jailed for financial crimes. Owners of conglomerates or chaebols found guilty of financial crimes, including the biggest names in Korea, have traditionally been treated deferentially by the courts and let off lightly, under the excuse of “preventing shock to economy.” Seven owners of conglomerates have been indicted for financial crimes since 1990, but all of them received suspended sentences and eventually pardoned by the presidents.

  

Kim Seung-Youn was once put behind bars in 2007 for hiring gangsters to physically retaliate against a few hoodlums who beat his 2nd son pretty badly in a bar fight. Kim took the kidnapped hoodlums to a mountain in Seoul, and, wearing boxing gloves, personally punched them in the face till they were nearly dead. Not sure about this time with financial crime, but many were sentimentally supportive of Mr.Kim in 2007 for what he did for his son.

3. Auto Industry
1) Hyundai Chairman Chung visit his U.S. facilities
Hyundai Kia Automotive Group Chairman Chung MongKoo made quick visits to Hyundai Motor America in LA, HMMA in Alabama and KMMG in Georgia in three days. Mr.Chung met with Georgia Governor Nathan Deal and Alabama Governor Robert Bentley.  Mr.Chung message throughout the trip was very simple. Make better quality cars, and compete against Japanese rivals not with price, but with quality.  To meet consumer demands, Mr.Chung has recently put three shift operations for HMMA and HMMG..

    

  The news of Mr.Chung making another quality comments in the U.S. must have sent shivers to Hyundai suppliers. As the quality has been the locomotive of Hyundai’s growth for the last 12 years, Hyundai’s quality commandos in full combat gears raid on the suppliers that created quality problems. The commandos use all sorts of quality weapons like SPC grenades or 5S rifles to kill the possible suspects. If their ammunition runs out with suspects still hanging around, they turn into kamikazes, making your once peaceful plant a downtown in Baghdad.

Regards,
H.S.

LTW - Dokdo Visit, Olympic Medals, & Electricity Rise

1. National

1) Lee Myungbak’s visit to Dokdo creates controversy

President Lee Myungbak made a surprise visit to Dokdo, an island Japan calls Takeshima, on Aug 10. Lee declared at the island, “Dokdo is genuinely our territory. Let’s defend it with pride.” While Korean government said the president’s unprecedented visit should not be an issue as the island belongs to Korea, Japan made a strong protest, immediately recalling its ambassador to Korea. Japan also said they would take Dokdo issue to International Court of Justice. Many try to understand Lee’s visit as a result of his frustration with the Japanese government over the issue, but there is a suspicion that Lee used Dokdo visit as the last tool to boost his rock bottom approval rating of 18%. 

  

What would the rest of the world think if Barack Obama suddenly pops up in Anchorage, and declare “Alaska is genuinely our territory. Let’s defend it with pride.” Lee’s appearance in Dokdo might be appealing to Koreans emotionally, but he probably just kicked off the process to turn it another Kashmir between Korea and Japan. 

2) Olympic Team South Korea shines in London

It took 20 days of travel from Seoul to London when South Korea’s first Olympic team participated in 1948 London Olympics where Korea South Korea won only 2 bronze medals, ranking 32nd.  Sixty four years have passed, and South Korea won 13 golds, 8 silvers and 7 bronzes, ranking 5th after Russia. Korean archery team took 3 golds out of 4, and shooting team won 3 golds out of 15. North Korea also did quite well as it won 4 golds and 2 bronzes, ranking 20th. The most watched event was the soccer match against Japan for bronze medal in which Korea beat Japan 2:0. 

     

Koreans are not allowed keep guns, but won five medals (3 golds, and 2 silvers) in shooting events. Americans can carry guns freely, but gained four medals (3 golds and 1 bronze). Another mystery to be listed in Ripley’s Believe It or Not. 

2. Economy

1) Psy’s “Gangnam Style” creates Psy syndrome around the world

K-Pop rapper Psy’s “Gangnam Style” has exploded in the U.S. and the rest of the world. Drawn by funky beat and funny dance moves, over 20 million people and on have seen the 4 minute video clip. It ranked No.25 on Billboards ‘Social 50’, and was featured on CNN, proving its global popularity. Hundreds of parody videos have been uploaded in the YouTube. People are calling Gangnam Style the second Macarena, which became a hit all over the world in 1996 with its addictive dance move and catch melody. Gangnam, meaning south of river, is a newly built posh town south of Seoul, where Renaissance Hotel, Samsung and Hyundai-Kia HQ are located. 

If interested, please click http://www.dailymotion.com/video/xs87f4_psy-gangnam-style-yyyyy-mv_music    For CNN report, hit http://www.youtube.com/watch?v=Bz95ahmCEGQ  

     

Foreigners think the catchy chorus part “Oppan Gangnam Style,” meaning “I am Gangnam Style,” sounds like “Open Condom Style.” No problem. You will find the “Gangnam Style” is sexy as well.

2) Electricity bill to rise 4.9%, again

The government allowed the increase of the electricity price by an average of 4.9%. The increase for households is 3.9%, while 6% for industries. If a household uses 300Kw a month, it will pay 1,200 won ($1.06) more, and a company with 59,000Kw a month will pay 327,000 won additionally. Korea Electricity Power Corporation (KEPCO) originally requested 10.7% up last month. There was 9% increase last year, and another increase is expected at the end of this year. Koreans still enjoy the electricity only half the price of what it is in Japan, and this is blamed for the severe electricity shortage last week under 36degree (96F) hot weather as people do not feel the need to conserve energy. KEPCO is currently selling the electricity below cost, and this is why they are under 3 trillion won ($26.5B) debt

     

KEPCO’s headquarter is also located in Gangnam. It is appealing to Koreans not to use electricity these days. It is like Ford is putting ads on CNN, begging consumers not to buy Taurus. Strange it may sound, but that is “Gangnam Style.”

3. Auto Industry

1) Renault Samsung Motors to cut its employees

When Carlos Ghosn showed up in Korea last month, he was an angel to RSM employees as Ghosn announced that Rogue will be manufactured in RSM’s Busan plant from 2014 for export to the U.S.  When he sent another message from his office in France after his return, he was a devil as his message was to cut heads.  RSM just announced that they would accept voluntary “honorary retirement” to cut costs due to weak auto sales. RSM is offering up to 24 months salary in addition to legal segregation pay. There are currently 5,500 employees and RSM plans to reduce 2,000 or more. RSM said the company would become much healthier after restructuring. RSM has been suffering from slow sales since last year, and took it a shock to fall behind Ssangyong Motors, the perennial last one, from June this year. 

   

The economy in Europe is bad these days, and French car makers are closing their plants in France, appealing the French government to do something about Korean made cars sold in France under FTA. Carlos Ghosn, however, announced that he will make Rogue models in Korea, instead of his original plan to make them in France.  Is Carlos Ghosn also a “Gangnam Style?”

Regards,

H.S.

LTW - True Beauty?, Math Olympic Gold, & a Powertrain

1. National
1) Controversy over Miss Korea’s true beauty
The movie “Face Off” starring John Travolta became a reality. This year’s beauty pageant winner Kim Yu-mi, who won the title of Miss Korea three weeks ago, has confessed that she was not born beautiful. Kim’s comments came as her photo in her high school yearbook had an extremely different look from what she wears now. Just in case you do not see the picture below, it was like Rosie O’Donnell turning into Paris Hilton. Kim said she understands people would be disappointed by the revelation, and that she hopes to make a name for herself for her inner beauty rather than her outer beauty. As Miss Korea is to compete in Miss Universe competition to represent the beauty of Koreans, many are saying Kim should be dethroned, and her runner up, who got no plastic surgery, should compete in Miss Universe event instead.

That no human beings are better than God was a true statement until Kim Yu-mi became a Miss Korea.  Kim’s plastic surgeon became a living proof that human beings are mightier than God.

2) Korean singer gets U.S. President’s volunteer Award
Singer Kim Jang-hoon won the U.S. President’s Volunteer Service Award for his 15 billion won charitable donations in Korea , which was most used to place pubic service ads in major U.S. newspapers, and for his donations in the U.S. charity organization, all of which boosted the Korea-U.S. friendship.  Kim’s public ads in the U.S. media were about Dokdo Island which Japanese call Takeshima, and East Sea also known as Sea of Japan. Maybe Kim’s efforts seem paying off as the French publisher of world’s most authoritative world atlases is using both names “Mer de l’est(East Sea) and “Mer du Japon (Sea of Japan)” in its 2012 version.

I personally think Kim Jang-hoon is an imbecile for putting ads in the U.S. newspapers, claiming “Dokdo belongs to Korea, not Japan.” Korea has occupied the island from 1948 with 40 policemen staying there, and any attempt by Japanese navy to take over Dokdo is tantamount to declaration of war. If Americans read Kim’s ads, they might think Dokdo is a disputed island. Mr.Kim! It is perfectly O.K with your East Sea ads in New York Times, but please stop ads on Dokdo immediately!

3) Korean students win Math Olympiad 1st time
Korean high school students won six gold medals to earn a total score of 209 points in the 53rd International Math Olympiad in Mar del Plata, Argentina, held from July 4th. They bat out Chinese team which came in 2nd with 195 points and the U.S. team, which ranked 3rd. This year’s competition involved 548 high school students from 100 nations. It was Korean team’s first victory since its first participation in 1988. North Korea ranked 12th with two gold medals, while Japan came in far behind in 17th place.  The math Olympiad, which was first held in Romania in 1959, is held in a different country every year, and it will be Santa Marta, Columbia next year. In 2009, Korean students also ranked first in math skills at the Program for International Student Assessment(PISA).

It is a shame that, despite all the Obama praise of Korean education system and victory in PISA and the International Math Olympiad, only one Korean got Nobel Prize,  late president Kim Daejung who won the Peace Prize in 2000 after his historic handshake with North Korea’s Kim Jongil while Japanese won 18 prizes.  Korea has a long shot for Nobel prizes unless Nobel committee creates its seventh category called Nobel Prize in Women’s Golf.

2. Economy
1) Apple ordered to advertise for Samsung
Samsung and Apple are engaged in an all out patent war all over the world.  A victory for Samsung came from Britain as the British court has ordered Apple to post a notice on its website and run ads in major British media, citing the court ruling that Samsung did not copy the iPad. Apple was clearly upset as its lawyer said “No company likes to refer to a rival on its website as it is tantamount to advertizing for Samsung.”  Apple has appealed the ruling. In other patent fight in Australia, the Australian judge urged both Samsung and Apple to settle their “ridiculous” dispute.

Not sure if Samsung can smile at British ruling. The British court ruled that “Samsung’s Galaxy Tab did not copy Apple’s design. Samsung’s tablets were unlikely to be confused with the iPad because Galaxy Tab is not as cool.”

3. Auto Industry
1) Korea Powertrain to supply 9 speed torque converters to ZF
Korea Powertrain announced that they will begin supplying torque converters for 9 speed transmissions to ZF Germany from 2013 until 2021 with total volume of 2.8 million units, totaling 1 trillion won ($871M) in sales . Because of the technical complexity of torque converters, Korean auto makers had to import them from overseas in the past. That changed in 1995 when Korea Powertrain began to manufacture torque converters for 4 speed transmissions. Korea Powertrain kept growing to take 95% of the market in Korea in 2011, and ZF decided to work with Korea Powertrain in 2010 for the development of its world’s first 9 speed transmission. Mr.In-Shik Joo, the CEO of the company, felt it a pity that he can not sell his torque converts to Hyundai yet as Hyundai still can not make 9 speed transmissions. Mr.Joo added that, with the supply to ZF and other overseas customers, his company’s sales will jump from 308 billion won in 2011 to 1 trillion won by 2020. A graduate of Hanyang University, Mr.Joo left Hyundai 1993 after 16 years in purchasing to establish Korea Powertrain.
    

Established in 1939 as Korea’s first engineering college, Hanyang University has produced many leaders in Korean business world, mostly in the manufacturing industries. Hanyang ranks No.2 in the number of CEOs in Korean companies and Mr.Mong-Koo Chung, the CEO of Hyundai and a graduate of Hanyang, has donated millions of dollars last year to build the “Future Automotive R&D Center” in Hanyang. My brother and I am also from Hanyang, just in case you are wondering why so much plug for Hanyang here.

2) Renault Samsung to make Rogue SUV for U.S. market
Carlos Ghosn, the CEO of Renault-Nissan, was in Korea to support Renault-Samsung Motors which has been suffering from falling sales. Ghosn announced that it will invest $160M in RSM to produce 80,000 units of Nissan’s Rogue models from 2014 for exports to the North American market. This is the first time in Korea that a car maker will be manufacturing vehicles for another brand solely for overseas market. The original plan was to have Nissan build the Rogue at its plant in the U.S., but Ghosn made a decision to make it in RSM to support the ailing company. Another reason for Ghosn decision was benefits from Korea’s FTA with the U.S. Ghosn said that Renault-Nissan Alliance is fully behind RSM as it is one of the most competitive plants.

Sales falling even behind Ssangyong Motors to rank last in Korea, the employees in RSM have been discouraged for months  It seems like their prayers to God, oops, to mightier Miss Korea’s plastic surgeon, for the survival have been finally answered with Carlos Ghosn’s visit to Korea.

Regards,
H.S.