Category: Korea-Business

When I first heard that Tiger Woods was driving a Genesis branded SUV during his crash I have to admit I was a bit surprised he was driving one:

Are Genesis cars and SUVs safe?

After Tiger Woods crashed a Genesis GV80 SUV in the Los Angeles areaTuesday, causing devastating leg injuries, the safety of the little-known luxury brand made by Korean automaker Hyundai was thrust into the spotlight.

On social media, some people speculated that the SUV’s safety features may have saved the golf legend’s life, given that authorities said he was traveling at a high speed. Others questioned whether the vehicle should have done a better job of protecting Woods.

Independent assessments of Genesis vehicles have given them high marks for safety.

USA Today

You can read more at the link.

Not a good look for Hyundai’s EV program:

Hyundai Motor Co. said Wednesday it will replace batteries in some 82,000 Kona EV and two other electric vehicles sold globally due to potential fire risks, which could cost about 1 trillion won (US$899.7 million). 

Hyundai will begin the replacement of the battery management system (BMS) in 75,680 Kona EVs, 5,716 IONIQ EV and 305 Elec City buses from March 29 in the domestic market and from April in overseas markets, the company said in a statement.

Yonhap

You can read more at the link.

Sitting on an airplane for over two hours to nowhere in particular during a pandemic is not high on my list of things to do. Apparently there are enough people willing to do these flights to make it profitable:

Korean Air Lines Co., South Korea’s biggest carrier, has joined other airlines to offer “flights to nowhere” as a way to ride out the coronavirus crisis, the transport ministry said Sunday. 

Korean Air plans to use the A380 passenger jet on the route from Incheon to the East Sea, Busan, Jeju Island, the Straits of Korea and back to Incheon on Feb. 27, a ministry official said. 

The entertainment-packed flight to nowhere will take two hours and 20 minutes. It is priced at 219,000 won-700,000 won (US$200-$630) depending on cabin classes, he said. 

The company has yet to decide whether to continue to sell the flights to nowhere in March. 

Local airlines such as Asiana Airlines Inc. and Jeju Air Co. began selling such flights late last year. Asiana still offers the product, but Jeju Air’s is no longer in service.

Yonhap

You can read more at the link.

Now Hyundai is saying they are not discussing a partnership with Apple:

Hyundai Motor Co. and affiliate Kia Corp. said Monday they are not in talks with Apple Inc. over an electric car manufacturing project in response to reports of their suspended discussions.

In separate regulatory filings, Hyundai and Kia, which together form the world’s fifth-biggest carmaker by sales, said they are “not in talks with Apple over developing an autonomous vehicle.” 

The carmakers said they are considering forming a partnership with foreign companies in regard to self-driving electric vehicles but no decision has been made yet.

Yonhap

You can read more at the link.

It is amazing that a retail U.S. video game company GameStop could have a major effect on the South Korean economy, but it has:

Yet, despite media hype about imminent bankruptcies of short-selling hedge funds and the historic win of small investors against Goliath hedge funds, statistics by S3 quoted in a recent CNBC report showed that most short-selling positions held by hedge funds are still intact, holding onto their bearish perspective on the stock’s future. 

A swarm of retail investors gathered on social media ― through Reddit’s WallStreetBets and Twitter messages ― expressed their anger over the unlevel playing field as evidenced by Robinhood and other U.S. brokerage firms’ unexpected suspension of the stock’s trading during the last two trading sessions last week. 

While U.S. regulators and politicians announced their plans for investigation and hearings on the matter, whatever will be the final result of the battle ― plunge of the stock price or short sellers’ major losses from a possible short squeeze ― one thing for sure is that now could be the start of a watershed moment.  (………..)

There was a massive selloff of Korean stocks in the KOSPI index at Friday’s session, net-selling 1.4 trillion won ($1.25 billion) worth of stocks, dragging down the nation’s benchmark index. 

“At this point, it’s very hard to predict how this event will turn out, as no one can be sure about future directions by countless retail investors on a global scale and numerous hedge funds’ moves as well,” Lee Hyo-seok, an analyst at SK Securities, told The Korea Times. 

“One thing for sure is that the market volatility is bound to increase for the time being; some say this would bring a major financial crisis, but as of now their assertion lacks substantial or concrete evidence at all. Thus at this point, we can only say the market uncertainty is growing,” the analyst said cautiously, adding that foreign money hasn’t yet escaped from ETFs following the Korean indexes. 

Other stock market researchers say while it’s too early to say whether the bubble will soon pop, investors’ investment sentiment preferring risky assets will be somewhat wavered. Some market experts say concerns about the increased volatility would bring financial authorities’ earlier tapering measures, which could add more volatility in the end.

Korea Times

You can read more at the link, but the GameStop saga has really exposed how the hedgefunds have gamed the financial system and it will be interesting to see how this unfolds.

Major conglomerates in South Korea are ready to push back against the ruling party’s attempt to make them give up profits to other companies not making profits. It is going to be interesting to see how this plays out:

The move is sparking backlash from large business owners, with major companies claiming the measures are only implemented in socialist or communist countries. Companies have also been criticizing the proposal over the lack of guidelines determining on which level a company is deemed profitable.

The ruling party has stressed that the profit-sharing scheme would not be compulsory and that each company’s voluntary participation would be encouraged through various incentives. However, business insiders believe the government will continue to pressure firms to take part in the initiatives.

“The government says it is voluntary but will continue to pressure firms to take part in the profit-sharing scheme,” an industry official said. “The Moon Jae-in administration has restrained companies with dozens of new regulations that severely impact business operations. This administration has pressured companies financially much more than other previous governments.”

Dozens of corporations including Samsung Electronics, LG Electronics, Kakao and Woowa Brothers are expected to be subject to the scheme as they have been able secure large profits amid the prolonged pandemic.

Korea Times

You can read more at the link, but it is the responsibility of the government that shutdown companies like restaurants and bars to subsidize them through tax money, not other private businesses.

There have been rumors about Apple wanting to get into the car business and are apparently close to a deal with Hyundai to do just that:

Hyundai Motor and Apple Inc plan to sign a partnership deal on autonomous electric cars by March and start production around 2024 in the United States, local newspaper Korea IT News reported on Sunday.

The report follows a statement on Friday from Hyundai Motor that it was in early talks with Apple after another local media outlet said the companies aimed to launch a self-driving electric car in 2027, sending Hyundai shares up nearly 20%.

Hyundai Motor declined to comment on the report on Sunday, and reiterated Friday’s comments that it has received requests for potential cooperation from various companies on developing autonomous EVs.

Reuters

You can read more at the link.

Tesla is upset because this new policy to reward companies that make green cars leaves them out:

Attention is growing over a local policy incentivizing car manufacturers to produce more eco-friendly vehicles, as Tesla is known to be lobbying the government in an attempt to benefit from the program.

The policy requires local carmakers to increase the portion of eco-friendly vehicles they produce. The program fines companies that fail to meet the required percentage of green cars, but rewards those that do by providing incentives.

The U.S. tech company claims the policy is unfair because it only applies to car manufacturers that sold at least 4,500 vehicles here as of 2009. Tesla does not fall under this category.

The company is known to have stated the policy goes against the national (equitable) treatment principle under the Korea-U.S. Free Trade Agreement (KORUS FTA). The principle requires governments to treat local and foreign businesses equally, given products of the foreign business have entered the local market.

Korea Times

You can read more at the link, but the Korean government’s perspective is that they don’t want to reward a company that already makes nothing, but green cars.

Americans bringing dollars to Korea are getting a worse exchange rate:

Korea’s currency hit a 30-month high against the U.S. dollar Thursday as investors’ interest in safe-haven assets dwindled and expectations rose for vaccine development and further fiscal stimulus in the United States.  
   
Korea’s won closed at 1,097 won against the greenback Thursday, going below the 1,100-won level for the first time in two and a half years. The currency appreciated by 3.8 won, or 0.34 percent, against the U.S. dollar compared to the previous trading day.  
   
The exchange rate went to as low as 1,096.2 won Thursday. 

Joong Ang Ilbo

You can read more at the link.

This could just be a tactic to end the strike, but at some point I am sure GM has some red line they have identified to close their plant in Korea if this continues:

An executive of General Motors Co., the parent company of GM Korea Co., said the U.S. automaker could withdraw from South Korea if workers at the Korean unit continue to go on strike for wage hikes amid the COVID-19 pandemic, according to GM Korea Thursday.

GM Korea workers have been staging several rounds of partial strikes since Oct. 30, demanding an end to a wage freeze and a new vehicle production plan at its No. 2 Bupyeong plant in Incheon, just west of Seoul. 

The persistent industrial action has cost the company 17,000 vehicles in lost production, and the number is expected to reach 20,000 by the end of the week, Steve Kiefer, president of GM’s international operations, told Reuters.

Yonhap

You can read more at the link.