L2W: Severance Splits, IT Theft, BMW Test Drives

1. National

1) Severance pay to be split in divorces

The Supreme Court ruled that a retirement pension or severance payment expected in the future should be included in the property to be divided when a married couple files for divorce, ending a 1995 precedent that ruled the opposite. Pension and severance pay were excluded in divorce settlement because it was difficult to calculate how big they would be. The Supreme Court decision last week was about a divorce suit over a couple of 14 years of marriage, in which the husband requested a share of his wife’s pension, claiming he had contributed to his wife’s career as a teacher.

With close to 30 years working in two companies in my career, I am also entitled to get pension and severance pay upon retiring. My wife has been working at home. There would be no divorce with my wife.

2. Economy

1) GM Korea O.K with fixed bonus as ordinary wage

GM Korea said it would count fixed bonuses as “ordinary wage” to make a deal with union workers threatening to go on strike over wages. While this proposal can avoid the risk of losing its recent sales momentum, it will cost the company significant money to keep its 14,000 employees as overtime payment is based on ordinary wage. A GM Korea spokesman said the decision reflects the company’s will to prevent anything that can disrupt the firm’s revitalization. GM Korea’s domestic sales reached 71,958 units from Jan to July, up 10.4% year-on-year and the highest output since 2004.

A local newspaper had a conspiracy theory, reporting GM’s decision might be intended to cut the cost competitiveness of its competitor Hyundai and Kia, which are also fighting against the union over the same ordinary wage issue. There was no man on the moon, and Sept 11 was the work of CIA, to the newspaper reporter.  

2) Samsung IT products robbed overseas

A Samsung factory in Sao Paulo, Brazil was robbed after two dozen armed bandits walked away with 40,000 smart phones and lap tops worth 36 million dollars on Jul 7 when eyes of whole world were on Brazil for the World Cup. This was not the first time Samsung has been the victim of robbery overseas. Its two state-of-the-art OLED TVs en route to a trade show in Berlin disappeared in transit in Sept 2012. In Oct 2012, 1,400 Galaxy Note 2 were lost in storage at a cargo depot in Kuala Lumpur, Malaysia, costing the company 1.16 billion won ($1.1M). Smarphones have become targets as they are small, but can bring good money when sold on the black market.

LG, a big rival to Samsung, probably didn’t want to be outdone. It also suffered robbery in October last year when a truck loaded with 22,999 G2 smartphones worth 15.8 billion won ($15.5M) disappeared in Kentucky while the truck driver stopped to go to toilet at a restaurant. Not clear whether the restaurant was KFC, though.

3. Auto Industry

1) Samsung SDI signs MOU for BMW EV battery

Samsung SDI and BMW signed a memorandum of understanding on Jul 14 for the supply of SDI’s EV batteries at BMW’s new driving center in Incheon. Though how much exactly the MOU is worth is not known, it is estimated to be billions of U.S. dollars.  Samsung SDI supplies batteries for BMW i3 launched last year, as well as electric sports car i8 to be released this fall. BMW sold 5,396 i3 EVs in the first half of this year, with U.S. sales exceeding 1,000 units in May. Samsung earlier signed a next generation EV battery supply agreement with Ford last month, is close to make a supply contract with Tesla.

Lee Kun-hee, the owner of whole Samsung and thus the richest man in Korea, was not at the signing ceremony as he is in coma from May 10. Samsung being the economic locomotive for Korean economy, many are wishing Mr. Lee get his health fully recharged like his SDI batteries and spring back to his office soon.

2) Grand opening for BMW’s test drive center in Korea

BMW has completed a test drive center in Incheon near Incheon Airport, its first in Asia. With 77 billion won ($75M) investment in 240K sq.m land, the size of 33 football fields, the test drive center has 2.6km closed circuit racetrack as well as training academy and showroom. It also has BMW’s fifth R&D center located at the center, with 20 engineers who focus on navigation systems designed for Korean terrain and car battery technology.

BMW is the No.1 foreign brands in Korea, selling close to 16,000 units in 2013, taking over 10% of import market share. Its 520d was the best selling import model with 8,346 units sold. BMW being so popular in Korea, many Koreans take pride in using BMWs for their basic transportation; Bus Metro and Walk.

Regards,

H.S.

L2W: Xi in SK before NK, DMZ Tragedy, & Illegal Subtitles

1. National

1) Chine leader Xi Jinping in Seoul, prior to Pyongyang

Xi Jinping visited Korea on July 3, the first time ever a Chinese leader made his first visit to South Korea, before its ‘blood ally’ North Korea. Xi and Korean president Park Gun-hye jointly announced nuclear free Korean peninsula and expedited FTA by the end of this year as well as other announcements that can put the U.S. and Japan in difficult position. Xi also met with Korean business leaders including Hyundai Chairman Chung Mongkoo who appealed for Chinese government approval for its new auto plant in Chongqing. Feeling betrayed by his big brother, outraged Kim Jong-un fired two missiles to East Sea in protest just a day before Xi’s visit. 

   

 The U.S. government was clearly not happy that South Korea is getting close to each other, in fear of a crack in U.S.-Japan-South Korea alliance against China for regional peace. So uncomfortable that the U.S. State Department even declined comment on the Xi-Park summit meeting result. Park Geun-hye now has to dance under two loud speakers that blare out Love me tender and Saturday Night Fever separately at the same time. 

2) A Fragging in DMZ kills five of his comrades

A Korean soldier serving in DMZ, identified as Sergeant Lim, threw a grenade and fired at his fellow soldiers, killing 5 and wounding 7 others on Jun 21. He was caught wounded two days later after failed suicide attempt in standoff. It is reported that Lim had hard time to fit in, been harassed by other soldiers and often been taunted by those even under his rank. Lim lost his temper when he saw graffiti on a wall in the post, depicting him as a skeleton. Though Lim was classified as the soldier that needed extra supervision because of his mental problem, he was put in to patrol DMZ with live ammunition as there were not enough soldiers. Too tragic as Sergeant Lim and his victims were young men who were defending the nation at the most dangerous area under military duty at $100 a month. 

  

Korean military is facing lack of young men due to low birth rate these days, and it may be a time to think about conscripting females for equal opportunity. My wife swims longer than I, talks faster than I, yells louder than I, cooks better and I, and even negotiates harder than I with Louis Vuitton salesman. She was definitely better prepared to fight against North Korean army than I was 32 years ago.

2. Economy

1) Koreans sued over ‘illegal subtitles’ by U.S. TV producers

Police is investigating 15 Koreans after Warner Bros. and other U.S. TV producers sued them for creating subtitles for popular American TV series distributed illegally on the internet. This is the first time that individuals have been sued for merely making the subtitles for pirated TV series. American TV series have become very popular among young people after “Prison Break’ in 2005, and some 40% of Korean adults have been exposed to U.S. dramas through various channels. One of the biggest domestic websites streaming U.S. series has more than 200,000 members, some of whom voluntarily create subtitles and upload them. 

 

 I have learned English for 40 years, served in a U.S. military base for 2 years, worked in Hyundai Canada for five years, currently have been working for an American company for over 15 years, but still have problems in understanding American movies or soap operas without subtitles, especially when they are about comedy or complicated conspiracy. I wish the defendants win the lawsuit, and the sooner the better, as I can no longer fully enjoy all the good jokes by Leonard and Sheldon in ‘The Big Bang Theory’ without the subtitles.  

3. Auto Industry

1) Kumho expands its tire plant in Georgia

Kumho Tire, Korea’s No.2 tire maker after Hankook Tire, announced it is resuming construction of its plant in Macon, Georgia with investment of $413M to finish the construction by 2016.  The plant got a ground breaking in 2008, but the construction was halted after Kumho went to a debt workout program in 2009 during Lehman Brothers crisis.  Kumho said the Georgia plant will have annual production of 4 million tires. Kumho is currently the largest tire supplier for Hyundai Alabama and Kia Georgia plant. Kumho is relying on North American market for 20% of its total sales. Kumho has technical alliance with Yokohama Rubber.

   

 Kumho Tire and Asiana Airlines are subsidiary companies of Kumho Group.  Founded by late Park In-chon who started taxi business with two old American cars at the age of 46 in 1946, Kumho Group has expanded its business mostly in transportation business with 36 subsidiary companies. Kumho was Mr.Park’s pen name. 

2) Renault Samsung Motors offers diesel sedans

RSM announced it already has received 1,500 contracts for its SM5 Diesel sedan powered by Renaults’ 1.5 dCi diesel engine imported since it started accepting pre-orders on Jun 23. It said its SM5 D will be different from its competitors’ models as it is a ‘segment break,’ offering a downsized engine for customers who want European pragmatic style. RSM’s SM5 D is another proof Koreans are hot with diesel cars. Nine out of ten top selling import models are diesel.  Hyundai recently launched its Grandeur (Azera) with R 2.2L diesel engine to fight against German premium diesel sedans, while GM Korea has started selling Malibu Diesel, which has 2.0L turbo manufactured in Germany

 

 Despite high fuel efficiency, Koreans used to shun diesel engines for passenger cars because of noise from vibrations unique to diesel engines. Not any longer. With better technology products such as high performance balance shaft modules and isolation pulleys to control vibration, the diesel engines have become much quieter. I wish my wife also has good balance shaft modules and isolation pulleys when she is shopping in Louis Vuitton stores.

Regards,

H.S.