Category: Korea-Business

It looks like these Korean corporations will need to determine if having restrictions in the U.S. market is worth partnering with these Chinese firms:

Legal experts in Korea have begun to sound the alarm regarding LG Chem, SK on and POSCO Group, warning them that their joint ventures, established here in Korea with Chinese firms, could be designated as foreign entities of concern under the U.S. Inflation Reduction Act (IRA).

If their warnings turn out to be true, the products of their joint ventures may lose ground in the U.S. market, as they will not be able to enjoy benefits from the country’s subsidy rules.

Last Friday, law firm Kim & Chang said that joint ventures with Chinese companies are likely to be regarded as foreign entities of concern, as the U.S. Infrastructure Investment and Jobs Act defined the term as any foreign entities owned by, controlled by, or subject to the jurisdiction of North Korea, China, Russia and Iran.

“The U.S. will not allow its taxpayers’ money to flow into China,” lawyer Shin Jung-hoon of the nation’s largest law firm said during a conference on countermeasures against the IRA.

Korea Times

You can read more at the link.

I agree with South Korea’s move to increase chip production, but putting these plants within North Korean artillery range around Seoul is not a good idea. These plants are so important they should be built further south out of artillery range:

South Korea will create the world’s largest semiconductor cluster in the Seoul metropolitan area by attracting 300 trillion won (US$229.81 billion) in investments as part of efforts to secure a competitive edge in the sector, the industry ministry said Wednesday.

It is part of the government’s comprehensive plan to promote six key industries — chips, displays, secondary batteries, bio, future vehicles and robots — which also called for the corporate investment of 550 trillion won by 2026, according to the Ministry of Trade, Industry and Energy.

Yonhap

You can read more at the link.

This is a great deal by Ford to get their battery manufacturing facility built in the US by SK:

Rain had wetted much of the clay soil on the ground — rich terracotta earth colors — creating small and large puddles everywhere around a gigantic steel structure, densely embedded with millions of steel beams. 

Yet it was another busy Sunday for many of the 800 engineers and construction workers, who had turned up for work to “get moving” on schedule for the electric vehicle battery manufacturing plants, under construction in Glendale, about 84.5 kilometers south of Louisville in the U.S. state of Kentucky. 

The 6.28 million-square-meter construction site, unveiled to South Korean media on Jan. 8, is where South Korean battery producer SK On Co. and Ford Motor Co. are building what will be the biggest EV battery plants in the United States for such a facility built on a single site. (………..) The project is part of the US$11.4 billion investment the two companies’ joint venture, BlueOval SK (BOSK), announced in September 2021, to build twin EV battery plants in Kentucky and a third one in Tennessee.

Yonhap

You can read more at the link, but I wonder how much of the rare Earth minerals being used in the battery construction is still coming from China?

When I was in Itaewon recently the place did seem far less vibrant than before the accident:

An alley in Itaewon in Yongsan District, central Seoul, near where the deadly crowd crush occurred is empty on the night of Jan. 14. [CHO JUNG-WOO]

The once bustling alleys of Itaewon in central Seoul were deserted on a recent Saturday night. Staffers of pubs and restaurants stood out in the cold encouraging the occasional passerby to come in.  
   
It’s been almost three months since the crowd crush on Oct. 29 took the lives of 158 people, and that of a teen survivor who committed suicide shortly after.     
   
People clearly don’t feel comfortable going back to the area to party, and the pain is only deepening for business owners in Itaewon.   

Joong Ang Ilbo

You can read more at the link.

Some happy chaebol chiefs today in South Korea:

Korea and the United Arab Emirates (UAE) signed a total of 24 agreements worth $6.1 billion in traditional industries, such as energy and defense, as well as emerging businesses, including hydrogen, mobility, bio and digital transformation, according to the Ministry of Trade, Industry and Energy, Monday.

The ministry said about 320 officials from business lobby groups, Samsung Electronics, Hyundai Motor Group and other Korean companies, who accompanied President Yoon Suk Yeol’s state visit to the Middle Eastern country, held the Korea-UAE Business Forum at the Rixos Marina Abu Dhabi hotel.

Korea Times

You can read more at the link.

This is just another example of how Koreans like to keep up with the Joneses:

Koreans were found to have spent the most per capita on high-priced bags and other luxury goods, according to a report by Morgan Stanley. 

The global investment bank said it estimated that Koreans’ total spending on luxury items grew 24 percent to $16.8 billion (208.6 trillion won) in 2022 from a year ago, which is about $325 per person. The per capita figure is far more than the $280 and $55 spent by Americans and Chinese, respectively.

Morgan Stanley analyzed that the high demand for luxury goods among Koreans comes from their increased purchasing power over the years and desire to flaunt their social standing by wealth.

Korea Times

You can read more at the link.

This is another reason why something needs to be done about illegal immigration, to stop the exploitation of children:

At least four major suppliers of Hyundai Motor and sister Kia have employed child labor at Alabama factories in recent years, a Reuters investigation found, and state and federal agencies are probing whether kids have worked at as many as a half dozen additional manufacturers throughout the automakers’ supply chain in the southern U.S. state.

At a plant owned by Hwashin America, a supplier to the two car brands in the south Alabama town of Greenville, a 14-year-old Guatemalan girl worked this May assembling auto body components, according to interviews with her father and law enforcement officials. (……)

Earlier this year, Reuters showed how staffing agencies in rural Alabama recruited undocumented workers from Central America, including minors who had entered the U.S. without parents or guardians, and supplied them to chicken processing plants.

As with those minors, at least some of the children who worked at Hyundai suppliers used false identities and documentation obtained through black-market brokers, sometimes with the help of staffing firms themselves.

Korea Times

You can read more at the link.

Getting rare earth minerals from Australia seems like a much more reliable alternative than China where they have demonstrated before they are willing to economically retaliate against South Korea to pressure them on issues:

Korea has been strengthening ties with Australia to produce rare earth elements and decrease its high dependence on China, as core minerals for high-tech industries are becoming increasingly important.

Although Korea is currently dependent on China for rare earth elements, Rowena Smith, CEO of Australia-based critical metals producer ASM, said the company has been strengthening relations in order to provide a stable supply of core minerals to Korean companies. (…….)

“In our experience, Australia’s and Korea’s business culture and shared values make us perfect partners to develop our business, using Australian natural resources and Korea’s access to skills and technology,” she added.

For years, ASM has been conducting the Dubbo project, which mines minerals such as rare earth elements from mines in Dubbo, New South Wales, Australia and processes them in Korea. Australia has the world’s sixth-largest deposit of rare earth elements of 3.27 million tons, after China, Vietnam, Brazil and Russia.

ASM said the Dubbo project serves as a sustainable and reliable source of core minerals such as rare earth elements, meeting the skyrocketing demand for these materials in the global market.

Korea Times

You can read more at the link.

It looks like the KCTU trucker protest has been a failure for them:

The trucker strike is over 16 days after it started, a majority of union members voting to go back to work, and some just dispersing.  
   
In votes held at 16 locations nationwide, 62 percent of the 3,574 that cast ballots agreed to end the strike.  
   
The decisive climb down came a day after the government said it would order more truckers back to work, extending the legally binding orders to steel and petrochemical truckers. Cement truckers received back-to-work orders last week, and all but one complied or indicated the intent to do so. (…….)   

“We decided not to ask the opinion of our union members as asking the members to vote on whether to continue to strike is an attempt by leadership to avoid accountability and pass that responsibility to the members,” a Busan union official said. “The general strike didn’t end up with the results that we expected was because of the Yoon Suk-yeol government breaking its promise, oppression and anti-labor policies.”    
   
Truckers went into strike on Nov. 24. Cargo Truckers Solidarity, the trucker union under the militant Korea Confederation of Trade Unions (KCTU), failed to rally public support amid concerns over the weakening economy and several reports of violence directed at  non-union truck drivers.    
   
The strikers were also swayed by the heavy penalties of the back-to-work order. They could face up to three years in jail and up to 30 million won in fines for not complying. Threats to end certain government subsidies were also made. 

Joong Ang Ilbo

You can read more at the link, but I think the threats the KCTU was making against trucker drivers trying to go to work really soured the public on the protests.