Tag: business

Considering how most of the fatalities from this deadly fire were foreign nationals, it is not surprising the company is being investigated for hiring illegal workers:

Police officers carry boxes confiscated from battery maker Aricell and workforce suppliers in Hwaseong, Gyeonggi Province, Wednesday, as they, together with the labor ministry, ratcheted up the investigation into a deadly fire at the company’s factory that killed 23 workers on Monday. Yonhap

The Ministry of Employment and Labor has launched an investigation into lithium battery maker Aricell over suspected illegal hiring of foreign workers after Monday’s deadly fire at its factory killed 23 employees, including 18 foreign nationals, officials said Thursday.

In particular, the ministry is looking into whether Aricell had directly imposed work orders on foreign temporary laborers hired by subcontractors, which is an illegal practice.

Korea Times

You can read more at the link.

This predictably did not go over well:

A team led by Andrew, comprising James, Chris and Lisa, engages in lively conversations about work while addressing each other by their first names.

This atmosphere is something that some Korean companies are trying to emulate by mandating all employees to use their preferred English name while at work.

The rationale is that they need to move away from the Korean language’s emphasis on honorifics, position titles and other formalities, to facilitate horizontal communication. The thinking is that, by ditching Korean names and the complex honorifics system attached to them in the Korean language, employees should be able to engage in more open and effective communication, encouraging innovation.

But does it actually work?

Predictable resistance

As one can imagine, not all employees welcome mandatory name-change policies with open arms.

At Kyobo Life Insurance, skepticism hangs over the company’s four-month-old English-name policy.

“It’s ridiculous,” said one employee who requested anonymity.

“Communication hasn’t improved, and some colleagues can’t even pronounce the English names, so we’ve had to post Korean pronunciations next to them on our company’s intranet.”

Korea Herald

You can read about all the examples of how this policy worked out at the link. It appears the younger the workforce is the more likely this policy will have better results.

The 52 hour work week is really just 40 hours like in the U.S. but has an additional 12 hours of overtime. I can understand how limiting workers to only 12 hours of overtime can constrain employers and workers in some industries:

The country currently adopts a 52-hour work week — 40 regular hours with 12 hours of possible overtime. It was introduced in 2018 by the liberal Moon Jae-in government to reduce the maximum week from 68 hours at the time to 52. 

Citing its latest survey, the ministry said the 52-hour workweek has substantially taken root, but some industries have still experienced management problems due to a lack of flexibility in working hours and difficulties meeting deadlines.

In the survey, 48.2 percent of the respondents said the 52-hour workweek has helped relieve matters stemming from work overload, but 54.9 percent said the existing system has failed to reflect the characteristics of some industries. 

In particular, both workers and employers in the manufacturing and construction industries as well as the medical, research and engineering sectors said overtime management of the current workweek needs to undergo changes.

Accepting these survey results, the ministry will maintain the 52-hour workweek, while at the same time beginning discussions with industries that have experienced difficulties abiding by the current rule, seeking to come up with complementary measures that could improve flexibility.

The ministry will also prepare measures aimed at resolving workers’ health concerns that could be affected by the long work hours at those industries.

Korea Times

You can read more at the link.

South Korea over the past two decades has really ramped up the export potential of their defense industry and it is paying off now as the world rearms due to Russian aggression and Chinese expansionism:

The Korean 4.5-generation fighter jet KF-21 makes its first maiden flight in Sacheon, South Gyeongsang, in July 2022. [DEFENSE ACQUISITION PROGRAM ADMINISTRATION]

U.S. allies and security partners worldwide looking to re-stock their arsenals are increasingly turning to Korean defense companies to procure weapons.  
   
Korea signed defense export contracts worth a cumulative $17 billion in 2022, representing a 242 percent increase in a single year and making the country the eighth-largest weapons exporter in the world.  
   
The growth in Korean defense exports, which made up 2.8 percent of a global arms exports market dominated by the United States, Russia, France and China, is all the more remarkable given the late start of the Korean weapons industry compared to the big players. 

Rising Korean defense exports also more broadly signal the country’s growing capacity and will to supply arms to other U.S. allies in the face of rising military threats posed by Russia and China in Europe and the Indo-Pacific region.  
   
Korea’s potential as a source of advanced military hardware at a time when countries are still ramping up defense production became apparent in December 2021, when Australia inked a $730-million contract with Hanwha Defense for 30 K-9 self-propelled artillery howitzers and 15 armored ammunition resupply vehicles, and again in July, when Poland announced that it had signed contracts worth an estimated $14 billion for K-2 battle tanks, K-9 howitzers and FA-50 light attack aircraft from Korea. 

Joong Ang Ilbo

You can read more at the link.

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.

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.

What the U.S. is doing is pushing industries to make a choice between the U.S. or Chinese markets. Korea is trying to find a middle ground which so far the Biden administration does not want to offer them:

Korea Inc. faces an uphill battle as a push in the United States for economic security is taking its toll on companies dependent on China for manufacturing or for the supply of materials and components.    
   
The U.S. is passing laws and enacting executive orders to bring the manufacturing of products important to national interest back to U.S. soil. Chips, batteries, electric vehicles(EV), solar cells and certain biotechnology products are on the list, and China is the main country of concern.    
   
A number of Korean companies have been affected already.  

Hyundai Motor’s EV sales in the U.S. have fallen since the passage of the Inflation Reduction Act (IRA), as its EV models won’t be qualified for the subsidies under the act.    
   
Samsung Electronics and SK hynix are having to rethink their use of China as a major manufacturing base for semiconductors as a number of U.S. rules are making it difficult to transfer key technologies to China, which is the second largest source of memory chips for these companies after Korea.      
   
Korea feels betrayed by its ally and is fighting for workarounds that would allow its companies to continue sourcing heavily from China. It is now engaged in an intense lobbying effort to get the rules watered down or waivers for its companies.  
   
This anniversary special will explore the impact of the U.S.-China tech war on Korean business and map out ways to curtail the damage. It is based on interviews with academics and researchers.    
   
Some argue that the dependence on China needs to be reexamined, while others argue that the Yoon Suk-yeol administration should come up with sizable financial incentives and tax cuts to attract manufacturing facilities for chips and high-tech products to Korea. 

Joong Ang Ilbo

You can read more at the link.

It will be interesting to see if under her leadership she is able to make Naver a global IT brand:

Naver will become an incubator that creates innovative technology penetrating the global market and seek to go beyond providing services that are popular today, the company’s new CEO said Monday. 

“Not only all businesses owned by Naver began with the thought of going global from the start, but all of the objectives also point to going global,” Naver CEO Choi Soo-yeon said at a meeting with shareholders and board of directors where she was appointed as the new chief.

The IT giant will focus all of its management efforts on becoming a global top-tier internet company, it added.

The appointment of the 41-year-old female executive marks a major shift in its management, the company said. Choi is the youngest CEO to lead Naver, South Korea’s fourth-largest company by market capitalization. Having Choi as CEO signifies that the management will be led by the younger generation who grew up with the internet, and no longer by those who pursued evolution of the platform businesses.

Korea Herald

You can read more at the link.