Fierce Moves by FKI Led by Kim Byung-joon... Ambiguous Tug-of-War in the Business World

The Federation of Korean Industries (FKI) is struggling to regain its status as the eldest leader of the business community. Since the appointment of Acting Chairman Kim Byung-joon, some progress has been made, such as regaining leadership of the economic delegation. The business community finds itself in a difficult position. After maintaining strict distance following the political scandal, the FKI now seems to be increasing its connection with the president due to the appearance of Acting Chairman Kim, who is aligned with President Yoon Suk-yeol’s faction. The gradual rumors of the four major conglomerates returning to the FKI add to the burden. Caught between the relationship with the president and the stigma of collusion between politics and business, the business community is left unable to act decisively either way.

Kim Byung-joon, Acting Chairman of the Federation of Korean Industries. Photo by Kang Jin-hyung aymsdream@

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On the 19th, the FKI was busy preparing the economic delegation for President Yoon Suk-yeol’s upcoming state visit to the United States scheduled for the end of this month. The economic delegation includes the heads of the four major conglomerates: Lee Jae-yong of Samsung Electronics, Chey Tae-won of SK Group, Chung Eui-sun of Hyundai Motor Group, and Koo Kwang-mo of LG Group.

This is the first time in eight years since 2015 that the FKI has organized an economic delegation for a presidential visit to the U.S. Earlier this year, the Korea Chamber of Commerce and Industry (KCCI) handled the economic delegation for President Yoon’s first overseas trip to the Middle East, but after Acting Chairman Kim Byung-joon joined the FKI last month, the organization regained leadership of the delegation. Previously, the FKI also organized the economic delegation and events during President Yoon’s visit to Japan last month.

The FKI was effectively excluded from official government events after it was revealed that it had served as a fundraising channel for the Mir Foundation and K-Sports Foundation during the 2016 Park Geun-hye administration’s political scandal. Subsequently, the four major conglomerates?Samsung, Hyundai Motor, SK, and LG?withdrew from the FKI, causing its influence to decline sharply. Since the Moon Jae-in administration, the FKI has been sidelined from meetings of economic organization heads, and the KCCI has mainly served as the official channel for recruiting economic delegations during presidential overseas visits.

When Heo Chang-soo, who had served as FKI chairman for six consecutive terms, announced his resignation in January this year, the FKI faced a crisis of survival. Unable to restore relations with the government, the FKI recruited Kim Byung-joon, chairman of the Community Chest of Korea and former senior election committee chairman for Yoon Suk-yeol’s campaign, as acting chairman in February to initiate reform efforts. It is the first time since the FKI’s founding in 1961 that a person without any corporate management experience has led the organization, but the move has resulted in regaining leadership of the economic delegation, which can be seen as a partial success of the FKI’s strategy.

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The business community has become ambiguous. The government is supporting the FKI, whose status has plummeted due to the departure of major groups and is far from representing economic organizations. The business community is at a loss about how to form relations with the FKI, which had lost trust due to various collusion scandals even before the political scandal, while also trying to keep the government’s favor.

Rumors of the four major conglomerates rejoining the FKI are also increasing the pressure. At a press conference last month, Acting Chairman Kim said, "I will make it so that not only the four major groups but any Korean businessperson would want to be with the FKI." However, in reality, the communication channels within the business community have already been reorganized mainly around the KCCI, so the return of the four major groups lacks both justification and practical benefit. The business community is also drawing a line, saying, "We are not even considering joining the FKI." They emphasize that attending events with President Yoon and rejoining the FKI are separate matters.

Acting Chairman Kim’s biggest tasks are reforming the FKI and bringing back the four major conglomerates. Since he has limited his term to six months, the 'revival of the FKI' led by him has about four months left. However, the business community’s response remains lukewarm. A representative from one of the four major groups said, "For the FKI, which lost trust due to collusion between politics and business, to reform, it needs to distance itself from political circles," adding, "I’m not sure the public would welcome companies rejoining an economic organization led by a typical politician."

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