1. National
1) Rebellion conspirators nabbed
National Intelligence Service agents raided homes of lawmaker Lee Seok-ki, and nine other members of the left wing Unified Progressive Party on Aug 28, on suspicion they conspired to stage a rebellion. NIS suspects the cell consists of some 130 people who met at a religious center in Seoul in May, and plotted to obtain fire arms and sabotage key infrastructure such as oil tanks in Pyeongtaek, and telecommunication center in Seoul in case the war occurs between the South and North Korea. The NIS has arrested three members of the cell, and has put a request to National Assembly to agree to the arrest of the law maker Lee who is thought to be the master king leader of UPP.
The UPP is a legalized Al-Qaeda to South Korea. They deny legitimacy of South Korea, and faithfully follow North Korean doctrines. The UPP members refuse to sing South Korean National Anthem, but happy to chant North Korean military song at 100db. Imagine Nazi followers in a political party in Israel, colluding to build another Auschwitz in Israel.
2) No ski equipment sales to North Korea
Switzerland has banned the sale of equipment for ski resort under construction in North Korea, citing UN sanctions against the North Korea. North Koreas approached Bartholet Maschinenbau AG to sell lifts and cable cars worth 7 million Swiss francs for its Masik resort just above eastern DMZ. A North Korean diplomat in Geneva said he was aware of the Swiss decision, but had no other information. Spending younger days in Bern, Swiss, Kim Jong-un is believed to have enjoyed skiing in Alps and has interested in developing leisure activities for its 23 million people. Kim is also interested in co-hosting the 2018 Winter Olympics to be held in Pyeongchang in South Korea, located about 180km south of Masik.
It seems Kim Jong-un is acting like a Prodigal Son in Bible these days. He agreed to reopen Kaesong Industrial Complex, allowed the reunion of families separated over 60 years after Korean War, pushed for the resumption of the Mt.Keumgang Tour above DMZ, kept his mouth shut over joint Korea-U.S. military exercise in August, invited foreign journalists and tourists to Pyongyang and now is determined to open a ski resort for his people. The sun seems to rise in the west in North Korea these days.
2. Economy
1) 3 times more to marry off son than daughter
According to a survey of wedding expenses of 973 married couples in 2012 by Korea Institute for Health and Social Affairs, it cost roughly three times more to marry off a son than a daughter with 107.4 million won($96,236) for a son and only 35.4 million won ($31,720) for a daughter. When asked about the most burdensome spending related to marriage, 81.8 percent of grooms responded buying or renting new home, while only 5 percent cited expenses related to the actual wedding. In contrast, 44.8 percent of brides said the most expenditure was with furniture and electrical appliances, followed by dowry including clothes for her bride’s family (12.5%) and buying their new home (12.4%). A KIHASA researcher said, “High wedding costs ends up causing people to delay marriage, and thus low birthrate.”
The general practice in Korea is that a groom is responsible for a new house and the bride for the stuffs to fill the house, and this is the reason for much more financial burdens for the grooms. I have two sons and no daughter. I would like to see the sun rise in the west in South Korea also.
2) A Big Mac for 42 minutes work in Korea
According to the Big Mac minimum wage index by U.S. ConvergEx Group, it takes 42 minutes or 0.7 hours for a minimum wage Korean worker to get a Big Mac as Korea’s minimum wage is 4,860 won($4.35) in 2012. The index is created by Britain’s the Economist in 1986 as a guide to see whether currencies are at their correct level by comparing how many hours it takes to earn enough to buy a Big Mac at minimum wage over 120 nations. Australia tops the scale at 18 minutes, based on minimum wage of U$16.88 per hour. At the bottom is Sierra Leone, where it takes 136 hours to get the burger at 3 cents per hour. Workers in Japan and Hong Kong are to work just 0.5 hours, while Chinese have to put in 3.1 hours, and Indians 5.8 hours. American workers have to work only 0.6 hours.
If the Big Mac price remains the same next year, Korean workers would spend 7.2% less hours to get a Big Mac in 2014 as the government increased the minimum wage by 350 won to 5,210 won for 2014. It was 6.1% increase from 2012 to 2013. Just a side note. I’ve made it a ritual to drop by MacDonald for a Big Mac whenever I arrive at an airport in the U.S. Hard to believe? Just ask my boss to show my expense report when I was in Atlanta last year, and Chicago this year.
3. Auto Industry
1) Hyundai Dymos to build a plant in Georgia
Hyundai Dymos announced that it will build a component plant in Georgia near Kia’s automobile plant, right after Governor Nathan Deal met with Hyundai Chairman Chung Mong-koo in Seoul last week. Dymos will invest $35M within the next two years to create new 350 jobs. Hyundai’s Alabama and Kia’s Georgia plant employ 6,300 workers. Other Hyundai affiliates like Hyundai Mobis, Hyundai Powertech and Hyundai Hysco have their plants in Alabama and Georgia. A total of 29 Korean suppliers for Hyundai subsidiaries have also set up plants in the U.S., employing 14,000 workers. In total, Hyundai and its suppliers have contributed for the creation of over 20,000 jobs in the U.S.
Dymos manufactures seats and manual transmissions for Hyundai and Kia, and its new Georgia plant is likely to produce seats only. The president of Dymos is Mr.JM Yoon who used to be the plant manager of Kia Georgia until the end of 2011. Mr.Yoon’s career is quite interesting. He worked in Hyundai’s Canada plant in Quebec as a paint shop engineer in the 80’s and 90’s, played plant manager for four years in Hyundai’s Turkey plant from 2003, and flew to Georgia to build the Kia plant in 2009. Mr.Yoon has been quite Dynamic as an auto Mobile Soul.
2) Renault Samsung getting ready for turn around
Renault Samsung Motors have been in bad shape for the last few years, even falling behind Ssangyong Motors this year, selling only 68,789 units worldwide as of end of July, down 26.8% from a year ago. RSM, however, is showing its determination to comeback. RSM was the first local automaker to reach an agreement with the union over wage increase. It began overtime to make more new face lift SM5 Platinum model as well as its 1.6L turbo version. Its smaller SM3 model’s sale is creeping up from 1,261 units in Jan to 2,110 in July. It will launch electric SM3 ZE in October, and new SUV QM3 at the end of this year. It also hired former president of VW Korea as its head of marketing. All these efforts in the hope of reaching 10% market share by the end of this year.
No way near Carlos Ghosn level, but I have been in Korean auto industry for 27 years. He might want to hear a few comments from me. Increase plant capacity for economy of scale as current 300K a year is too small. Increase local contents to replace expensive import components to reduce vehicle cost. Hire a head of R&D who understands why mid size sedan SM5 has to have trunk that can accommodate four, not three, golf bags!
Regards,
H.S.
