1. National
1) Kaesong complex in N.Korea to reopen
Officials from South Korea and North Korea finally came to an agreement on Aug 16 to reopen Kaesong Industrial Complex in North Korea after North Korea accepted S.Korea’s demand that the North take responsibility of the shutdown and promise to prevent a recurrence. Pyongyang promised that political factors will not affect the operation of the industrial park. The agreement came 133 days after N.Korea closed it to protest joint S.Korea-US military training. With the Kaesong agreement made, Seoul and Pyongyang are to begin negotiation this week on the resumption of North Korea’s scenic Mt.Keunggangsan tour, and reunions of families separated during the Korean War.
The agreement is viewed as a victory for S.Korean president Park Geun-hye who have kept strong stance despite bellicose threats from Kim Jong-un for the past several months. Park gave ultimatum earlier that South Korean companies will be paid for insurance for the properties left in Kaesong, meaning she is O.K even with Kaesong permanently closed, and dollar hungry Kim Jong-un finally became a chicken, turned the wheel, and raised a white flag. Park knew a barking dog never bites.
2) John Kerry sends special message for Koreans
U.S. Secretary of State John Kerry sent a video message to Koreans in celebration of Aug 15 Liberation Day. It is rare that the secretary of state send written statements on major national holidays of foreign countries. “On behalf of President of Obama and the American people, it’s my pleasure to congratulate the Korean people as you celebrate the anniversary of your independence,” said John Kerry in the video. He began and ended his message saying “Annyong haseyo” and “Chooka hamnida”, “hello” and “congratulations”, respectively. The video marks the 60th anniversary of the Korea-U.S. alliance, and a source in Washington said, “Kerry asked officials to come up with a special gesture to mark the anniversary.”
You are in bad situation if two of your best friends are growling at each other, and you don’t want to side with either of the two. Obama must be dilemma when Park Gen-hye or Abe asks his position on Dokdo Island (Takeshima) and East Sea (Sea of Japan). The best answer from Obama would be Dokdoshima and Sea of Middle.
2. Economy
1) Bacchus drink celebrates 50 years of stamina
Bacchus is a god of wine and giver of ecstasy, and it is why Dong-A pharmaceutical named it Bacchus for its noncarbonated taurine containing energy drink 50 years ago. Total of 17.7 billion bottles were sold in the past 50 years , and if all those were laid end-to-end, they would go around the earth more than 53 times. Over 480million bottles of Bacchus worth 170.9 billion won ($153.5M) were sold last year alone, and it is the best selling product as a single item at Dong-A. Celebrating the drink’s golden anniversary, Kang Shin-ho,, the chairman of Dong-A, announced that he plans to make Bacchus a global drink. Dong-A is exporting Bacchus to 28 nations including the U.S. and Canada.
Koreans carry gifts when visiting patients in the hospitals, and Bacchus has been the No.1 pick for many years. It tastes fine, and we are wishing the patients to get well and feel ecstasy soon.
3. Auto Industry
1) Ssangyong in black again
Ssangyong was in disaster after bankruptcy and massive lay off that triggered a Baghdad war in its plant in Pyeongtaik in 2009. India’s Mahindra bought Ssangyong in 2010, and got a new start. It seems it paid off as Ssangyong returned to the black in both operating profit and net profit with the highest earnings in 30 quarters in April to June. Sales reached 907 billion won, operating profit of 3.7 billion won, and net profit of 6.2 billion won in the 2nd quarter. Sales was up 26.9% from the same period last year, selling 38,195 units, 15,993 units in the domestic market, and 22,202 overseas. It was more impressive as the total sales of Korean cars took a 1.7% dive over the same period, and its market share rose from 3.2% in 2012 to 4.4%, making fun of Renault Samsung with 3.9%.
Ssangyong’s resurrection was possible because of new car sales and Mahindra’s belt tightening policy to yield profitability. But more important was the support of union which left it to company’s decision for this year’s wage negotiation. Ssangyong union turned itself around in three years the way Michael Jackson has changed his color.
2) Hyundai votes to strike
A record 80.4% of Hyundai Motor workers approved a strike at a vote on Aug 13. Hyundai union made about 180 proposals, which included wage increase of 130,500won ($117) per month, a 30% share of net profit and 10 million won for employee’s children who fail to go to college. The union walked off the table after Hyundai management decided not to respond to those demands. The union can strike as early as Aug 20 when the national Labor Relations Committee declares the arbitration period over. Hyundai has been in strike for 22 years out of the past 26 years since the union was founded in 1987.
The union is to Hyundai what Kim Jong-un is to South Korea, demanding ridiculous things with harsh threats. New president Park put an end to that practice with her handling of Kim Jong-un over Kaesong, and it is now Hyundai management’s turn to do the same job, especially with the large overseas capacity that can afford a strike in Korea. We will know soon if Hyundai management did a good job or not, by checking whether my wife still holds Hyundai shares she has kept for 14 years.
Regards,
H.S.