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.