The state-run Korea Development Bank’s chief Lee Dong-gull on Monday upped the pressure on ailing Kumho Tire’s resistant labor union, saying it flip-flopped on a verbal agreement on the company’s sale to China’s Doublestar over the weekend.

Lee called for the labor union to meet the deadline set by creditors for Friday by holding a general vote of all employees, but the union immediately refused the proposal, arguing that it had never consented to the sale plan.

“We suggest that the union holds a vote on all employees as soon as possible to verify whether they all stand with the union in opposing the attraction of foreign capital,” Lee said Monday in an urgent press conference.

“Union members and employees should be given the chance to decide for themselves on this grave matter which will determine their survival.”

His suggestion was shot down by the union shortly after the press conference ended.
 

As the major creditor to South Korea’s second-largest tiremaker, KDB has been seeking to push through an acquisition deal offered by Chinese tire manufacturer Doublestar.

The bank claims that the Kumho union had earlier given its verbal consent to the deal but changed its mind over the weekend, citing an unidentified purchasing offer by a local suitor.

“The union has (instead) mentioned the possibility of a domestic acquisition, but has so far clarified neither the name of the corresponding company nor the source of information,” Lee said.

“We have received no investment proposal whatsoever from domestic companies since we announced Doublestar’s investment plan on March 2.”

Following a press briefing Thursday in which Doublestar Chairman Chai Yongsen promised autonomous management of the local firm and job security for current employees, KDB and the Kumho Tire union held a closed-door meeting on Friday during which they verbally agreed to accept the acquisition deal, according to the KDB chief.

“Through our intensive meeting on Friday, (KDB and the union) made detailed agreements such as drawing up a labor-management-creditor joint statement by Tuesday this week at the latest and to put the issue to a union vote by Friday at the latest,” Lee said.

“The only reason that we kept the latest agreement undisclosed was due to the request of the union, which was slated to hold a rally on Friday to protest the overseas sale and could not call off the occasion at the eleventh hour.”

The union immediately lashed back against Lee’s claims.

“It is true that we held close-door meetings with Lee and Chai in Gwangju last week but never have we consented to the overseas sale deal,” an official of the union said in a press conference held at the company’s Gwangju plant held right after Lee’s.

The union also blamed KDB for unilaterally revealing what was discussed the meetings, which both parties agreed to keep off the record.

The KDB chairman repeated an ultimatum saying the tiremaker would enter court receivership unless it comes up with a self-help plan and union agreement on the Doublestar investment deal by March 30.

“The processes after court receivership will be for the court to decide, but given the circumstances, it looks like liquidation is more plausible than rehabilitation, in which case massive investor losses may be incurred,” Lee said.

By Bae Hyun-jung (tellme@heraldcorp.com)