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.