South Korean politicians have voiced their concerns about the pending Kumho Tire/Doublestar Tyre Co. deal, asking the Korea Development Bank (KDB) and other creditors not to sell to a Chinese company, the Korea Times reports.
According to local media, politicians, including presidential candidate Moon Jae-in, are backing public concerns that the purchase could lead to possible job losses.
“It is not pleasing for Jeolla residents to witness what’s been going on with Kumho Tire,” Moon said. “The company employs 3,800 workers at three domestic plants. We cannot afford to let the tire maker suffer the same fate as SsangYong Motor. The top priority is to ensure job security for all Kumho employees. Whoever acquires the company, it must not close local plants or dismiss workers.” (China’s Shanghai Automotive Industry bought SsangYong Motor in 2004 and fired hundreds of workers to cut costs following the acquisition.)
Kumho Tire is South Korea’s second-largest tiremaker, operating two of its three plants in the city of Gwangju and surrounding South Jeolla province. Kumho also has four plants in China, one each in Vietnam and one in the U.S.
Gwangju Mayor Yoon Jang-hyun has also voiced concerns over the sale and has asked KDB and other creditors to “come up with a range of follow-up measures to address increasing uneasiness,” the Korean Times reports.
Additionally, the politicians have asked creditors give Kumho Asiana Group Chairman Park Sam-koo a chance to buy back the tire company instead of selling to Doublestar.
Park has until April 13 to raise the funds to buy back Kumho, or Doublestar will acquire 42% shared for roughly $840 million. He recently threatened to sue KDB in an effort to pressure KDB to allow him to bid for a controlling stake in Kumho Tire through a consortium.