LTW - Madame Prez, Samsung#1, & NK's Moonie Motors

1. National

1) Park Geun-hye elected as 18th president
Winning 51.6% of the votes, Park Geun-hye of the ruling conservative Saenuri Party won the 18th presidential race, beating Moon Jae-in from liberal Unified Democratic Party. Park became the first female president, and got the honor of being the first child of a former president as she is the daughter of former president Park Jung-hee who ruled South Korea from 1961 to 1979. Park was mostly favored by the voters in the 50s and 60s who were not comfortable with Moon’s left leaning policies. Park’s 5 year term starts on Feb 25 next year. No 2nd term allowed in Korean law.
 




Park owes a lot to Lee Jung-hee, the female candidate with 1% approval rating from the Unified Progressive Party known for its extreme pro North Korea policies. In a live three way TV debates with Park and Moon, Lee kept making rudely vicious comments against Park, but expressed warm words to Moon. This led many to believe Moon was a good friend of Lee. It was a typical case of “You are helping me a lot if you do not help me at all” to Moon. President elect Park might be serious about hiring Lee Jung-hee as her PR woman.

2) North Korea launches rocket successfully
North Korea unexpectedly fired a long-range rocket on Dec 12, putting a satellite into an orbit successfully. This proved the fear that North Korea has the technology to deliver a nuke bomb 13,000km (8,075 miles) away, or any place of U.S. territory. Though the U.N. denounced the launch as the violation of U.N. resolutions against North Korea, no real sanction is expected to take place due to objection from China. After analysis of debris retrieved from the Yellow Sea, South Korean government said Pyongyang had used red fuming nitric acid to fuel the first stage propellant.  That chemical is mostly used for intercontinental ballistic missiles in other nations like Iran.
 




The rocket launch was a Korean version of Sputnik shock. South Korea’s two attempts to launch the Naro rocket for a satellite failed in 2009 and 2010, and the third attempt this year has also been a flop so far, with two abortions just minutes before lift-off. What is more embarrassing is that the 1st stage rocket for Naro was made in Russia, meaning Naro is not wholly South Korea’s rocket. South Korea better pay Kim Jong-un only one tenths of what it paid to Vladimir Putin, and beg Kim to launch the damn Naro satellite rocket for South Korea.

2. Economy
1) Samsung stands tall as #1 cell phone maker
According to HIS iSuppli, Samsung has become the world’s #1 mobile phone maker in terms of annual sales, taking 29% of the global market, overtaking Nokia with 24%. Samsung got this goal achieved 24 years after it began making cell phones. Samsung also maintained its top position in the global smartphone market, with 28% market share, beating Apple with 20%. Nokia, HTC and RIM accounted for 5% each. On a separate note, Motorola, the first maker of mobile phones, announced that it will pull out of Korean market by February next year after losing the battle against Samsung and LG in Korea.
 
Motorola is just another foreign company pulling out of Korea, like Wal-Mart or Carrefour, with no real impact to me personally. The problem is Yahoo as it will end its business as of December 31. I will have to type in all of my e-mail address in my yhs816@yahoo.co.kr account into my Gmail account. The good side of it? I will become #1 in 500 words per minute World Championship after all the e-mail address typing.

3. Auto Industry
1) Unification Church to pass automotive decisions to North Korea
Pyeonghwa Motors’s president Park Sang-kwon said the management control of the joint venture company between South Korea’s Unification Church and North Korea will be taken over by North Korean government, according to Voice of America. “We transfer the right to them to practically run the company,” Park was quoted. Pyeonghwa Motors began operation in 2002, manufacturing about 2,000 vehicles every year with five different Fiat models, but was not making enough money due to lack of economy of scale. The total capital of the company was 43.5 billion won ($40M)) as of 2009.

It is probably a good decision to transfer the right to run the company from South Koreans to North Koreans. North Koreans will soon make Pyeonghwa Motors a bigger company than Hyundai, from what we have seen with the rocket launching.

Regards,
H.S.

LTW - PCH Retires, Election Heat, Gender Gaps & Pricey Seoul

1. National
1) A Korean baseball legend retires
Chanho Park, former L.A. Dodgers pitcher, announced his retirement after 19 years in the U.S., Japan and Korea. Park was the first Korean major leaguer when he joined the Dodgers in 1994. His best season came in 2000 when he won 18 wins. Park also played in Texas Ranges, San Diego Padres, New York Mets, New York Yankees, and Pittsburgh Pirates, with total of 124 wins, the most win by any Asian pitcher in MLB, one more than Tornado Nomo Hideo who won 123 wins. Park played a season in Orix Buffaloes in Japan, before returning to Korea this year to play in Hanhwa Eagles.
         
 

There are other world class Korean athletes with Park as family name. Jisung Park of Manchester United, Taehwan Park who won a 400m freestyle swimming in 2008 Beijing Olympics, and Seri Pak who have won 25 LPGA wins. Why only Seri chose to use Pak, not Park, as her family name?  Well, R pronounced in Korean sounds like “testicles,” so Seri Pak better not have R.

2) Presidential race heats on
With the Dec 19 presidential election approaching fast, the two candidates are busy crisscrossing Korea to appeal to voters. One of the two is Park Geun-hyeo, the candidate from ruling conservative Saenuri Party, and the other is Moon Jae-In from liberal United Democracy Party. Park is the daughter of late president Park Jung-hee who got assassinated by his own KCIA director in 1979 after 18 years in power. She came into politics in 1998 when she became a lawmaker.  Moon is the protege of late president Roh Mu-hyun, serving as Roh’s secretary. Roh committed suicide in May, 2009 when he was under pressure over a financial scandal a year after he left the Blue House, Korean version of White House. Park is leading the poll by some 3 or 4 percent. If Park does win, she will become the first female president in Korea.
 
A big brawl occurred lately at a bar in heaven as Park Jung-hee and Roh Mu-hyun were having a fist fight over who has to become the 18th president of Korea. “It has to be my daughter! She knows Blue House very well after living there for 18 years.”  “Hell, no! There was a building renovation done in Blue House a few years ago while I was there, and your daughter doesn’t know a damn thing about where the main office is located.”

2. Economy
1) It is expensive in Seoul! 
Seoul is one of the most expensive cities in the world to buy wind, infant formula, smartphones, cosmetics and jeans because of its exclusive distribution structure, according to Consumers Korea which compared the prices of 55 daily necessities sold at department stores, discount stores and supermarkets in 18 countries. Seoul was among the top 5 most expensive cities for 17 of the products. For example, Ritz Lytton Springs Zinfandel wine from the U.S. was sold at the highest price of 113,000 won ($104.20) in Korea, followed by China (97,490 won), Italy (78,170 won), Taiwan (75,420 won) and Thailand (58,160 won). In the U.S., the same product retails for 28,000 won, meaning it is four times more expensive in Seoul. Exclusive distributors like department stores tend to import and distribute foreign wines, cosmetics, jeans and infant formula, and they have the most expensive distribution margins and sales commissions.
 
A Metaldyne executive once stayed in Renaissance Hotel in Gangnam, Seoul, and he was very much surprised at the $38 price tag for a breakfast buffet at the hotel.  He ended up gaining 10kg in a week in Renaissance Hotel. Being very strict in his cost efficiency policy, he emptied as many dishes as possible, counting how much money spent per kilogram of food he consumed.

2) Korea’s gender wage gap the most 
According to the survey by OECD, Korea has the largest wage gap between men and women among 28 OECD nations surveyed. The average man earned 39% more than the average woman in 2010. The wage gap in Korea was 2.6 times bigger than in the OECD as a whole, which is 15%, and 10% points higher than 2nd raked Japan which had 29%. The third place was Germany with 21% gap, followed by the U.S. and Canada. The gender wage gap in Korea was 40% in 2000, so it took 10 years to lower it by only one percent.
  

The gender wage gap in Korea is nothing compared to the wage gap between the military and the civilians. My two sons joined the military three months ago in September, the first son in the army and the second one in the air force. They are getting 81,500 won ($80) a month. Well, the wage gap has been narrowed a lot for the last 30 years. Their father got 3,000 won a month when he joined the army in Aug, 1982.

3. Auto Industry
1) GM Korea to build turbo engines 
GM Korea announced that it will invest over 100 billion won ($92M) to build next generation 1.4L turbocharged gasoline engines at its Bupyeong plant in Incheon. The turbo engine will power the Chevrolet models including Trax SUV from the first half of next year. Sergio Rocha, the president of Gm Korea, said “The significant investment is a clear evidence of GM’s long-term commitment in GM Korea and confidence in our ability to offer more advanced engines to satisfy our customers.”  There has been a criticism to GM Korea lately over its recent decision not to make new Malibu models in its Gunsan plant.
   
The Bupyeong plant is surrounded by high rise apartment buildings now, with land price about $360 per square foot, but there was nothing when Saenara Motor Company built the plant in 1962. The first model rolling off from Bupyeong was 1961 MY Nissan Bluebird that Saenara manufactured with imported components from Nissan as SKD (Semi-Knock-Down). It then became like Chapter 1 in Matthew in the New Testament. Saenara got sold to Shinjin Motors 1965. Shinjin Motors got bought by GM in 1972. GM sold the plant to Saehan Motors in 1976. Saehan then got purchased by Daewoo Motors in 1978. Daewoo Motors was acquired by GM in 2001.

Regards,
H.S.