Taking a Breather... 'Mountain After Mountain' for Kumho Tire

No Applications for Subcontractor Recruitment
Recruitment Expected to Continue Until the End of This Month

[Asia Economy Reporter Kiho Sung] Kumho Tire's management crisis is showing a "mountain after mountain" pattern. Although it has overcome the biggest hurdle of corporate account seizure, another crisis is growing with the recruitment of subcontractors. Some predict that if the recruitment of subcontractors fails like this, production disruptions next month will be inevitable.

According to Kumho Tire on the 21st, as of 6 p.m. on the same day, the third announcement for recruiting subcontractors for the Gwangju and Gokseong factories, which was scheduled to close, had not received any applications. Kumho Tire made the first announcement on the 7th but received no applicants, so the announcement has been continuously extended. According to the Kumho Tire irregular workers' union, about 720 employees work at six subcontractor companies, and they are known to be responsible for 10 processes. If contracts with them end all at once, the entire Kumho Tire factory will effectively come to a halt.

The six Kumho Tire subcontractors notified Kumho Tire on the 23rd of last month that they could not continue their business due to management difficulties. Subsequently, they informed the irregular workers employed by the subcontractors that their contracts would end by the end of this month, the subcontract contract termination date. However, as additional recruitment has stalled, two subcontractors notified Kumho Tire and the irregular workers' union on the 14th and 20th, respectively, that the contract termination date would be extended until the 20th of next month.

Although the most urgent corporate account seizure issue has been resolved, production disruptions are inevitable if new subcontractors are not found. On the 20th, the Gwangju High Court accepted Kumho Tire's request to suspend the provisional seizure of the corporate account. Kumho Tire is currently paying the full deposit of 1.8 billion KRW required by the court and is taking additional steps to lift the account seizure. If the court's final decision is made promptly, the worst-case scenario, such as unpaid wages, can be avoided.

A Kumho Tire official said, "If there are no applicants during the third announcement period, we will continue to extend the announcement until the end of this month."

This content was produced with the assistance of AI translation services.