Ford Motor to send team to help ailing Kia Motors

Ford Motor to send team to help ailing Kia Motors

SEOUL (AFP): A team from the U.S. Ford Motor Co., will arrive in Seoul this week to seek ways to help ailing Kia Motors, while the government said yesterday it was seeking a formula to save the auto maker.

"Ford will send a team sometime this week to Kia Motors to examine ways to help," Yonhap news agency quoted Kim Sun-hong, chairman of Kia Group, as telling reporters while attending the Frankfurt Motor Show.

Kim said he had recently paid a visit to Ford Motor, which has a 9.39 percent stake in Kia, to explain the financial problems facing the parent group, South Korea's eighth-largest conglomerate.

Meanwhile, vice-minister of Finance and Economy Kang Man-soo said the government was trying to come up with ways to solve the Kia crisis, and at the same time minimize losses for the creditor banks.

He said the government was having a difficult time trying to come up with a solution since it does not favor a third party takeover of the auto maker and the conglomerate is against court protection.

"We are planning to solve the Kia problem by saving Kia Motors and minimizing creditor banks' loss," Kang told reporters.

News reports said Kang had hinted that Kia Motors might be put under creditor banks' management, saying "there are several ways of how it could be managed by banks."

The Naewoe Economic Daily quoted an unnamed ministry official that under such an arrangement, the current management could remain, while the banks managed the financial side.

The Kia Group was put under bank protection in July and faces being declared insolvent when a two-month grace period for loan repayments expires on Sept. 29 -- if self-rescue and bail-out plans do not work out.