RI minister urges S. Korea to help Kia
RI minister urges S. Korea to help Kia
SEOUL (AFP): Indonesian Minister of Industry and Trade Tunky
Ariwibowo Thursday asked South Korea to take a special interest
in the ailing Kia Group, taking into account his country's
national auto program.
"We ask that the South Korean government take special interest
in Kia Motors so that there is no setback in Indonesia's national
car program," a ministry official quoted Ariwibowo as saying
during his meeting with his South Korean counterpart Lim Chang-
Yuel.
"President Soeharto and everyone in Indonesia have a special
interest in the project, and it must continue to be a success,"
he said.
Ariwibowo, who arrived in Seoul on Tuesday for a three-day
visit, toured Kia Motors' car plant before meeting with Lim.
Kia Motors, the flagship of Kia Group was put under bank
protection on July 15 to avoid insolvency. It formed a
controversial joint-venture firm "Kia Timor Motors" with
Soeharto's son as its partner last February to produce more than
2,000 Indonesian "national" cars every month.
The ministry official said Lim reassured the Indonesian
minister that there was no problem with Kia Motors, but the cause
of Kia Group's financial problems was its other subsidiaries.
Meanwhile directors of the ailing Kia Group, South Korea's
sixth largest conglomerate and third-largest auto-maker, said
they would step down if they could not put the company back on
its feet.
"Kia Group head and other top executives have offered to hand
in their resignations if they fail to turn the business around,"
said a Kia spokesman.
In a document given to its main creditor, Korea First Bank,
all 21 top executives including group chairman Kim Sun-hong
promised to save the firm or resign, taking responsibility for
the group being put under bank protection on July 15.
The spokesman did not give a time frame for the pledged
turnaround.
The management decision came two days after Korea First Bank
and nine other banks decided to jointly provide a 179 million
dollar lifeline to the troubled Kia Group before July 30 as an
emergency operational fund.
One of the strings attached to the loan was that Kim and his
top executives give up their managerial rights. Another condition
was that it sell off its second auto subsidiary, Asia Motors Co.,
which produces buses and trucks.
However, the spokesman said Thursday that Kia had dug in its
heels and had no plans to sell the money-losing Asia Motors.
"The company's position now is the same as it was in the
beginning. The group has no plans to sell off Asia Motors," he
said.
As part of the company's self-rescue plan to reduce the number
of its executives by 30 percent or some 100 people, 23 senior
advisors of Kia Group offered to resign Thursday, the spokesman
said.