The days of Mad Cow craziness in Korea seem like years ago, but it was just May of this year where it all first began. Amazing how much of a difference seven months can make. In today’s WaPo, special correspondent Stella Kim reports from Seoul that cheap meat trumps irrational, pseudo-scientific fear.
Some choice cuts:
Low-priced U.S. beef has appeared in supermarkets here in recent days, after a decision by three major retailers to start selling it again, and the reaction has been brisk business and no political fuss. Fifty tons of U.S. beef disappeared from shelves the first day it was offered for sale…
“It is our national character to get upset easily and then to forget all about it,” said Park Eun-ah, 48, a romance novelist who lives in Seoul and Paris…
Although the hysteria over U.S. beef is gone, a bitter aftertaste remains. The JoongAng Daily, a major newspaper here, said in a recent editorial that the episode had tarnished South Korea’s international image…
On a recent morning [at E-Mart], some shoppers seemed to need reassurance. They read the signs carefully and asked butchers if the beef was really safe. Many shoppers, though, simply grabbed U.S. beef and moved on.
Shin Mija, 40, was caught in the middle. She was happy to be able to buy U.S. beef again but said her two teenagers would not eat it. During the spring and summer, she said, her children had been convinced by protesters that American beef would give them mad cow disease.
Shin bought it anyhow. She said she would tell her kids it came from Australia.
Beef issue resolved (for now). Obama’s infatuation with having Koreans buy more American cars coming up…
{ 38 comments… read them below or add one }
Shouldn’t GM-Daewoo cars be considered American cars?
The US side considers Hyundais made in Alabama and sold in America, Korean cars, so why not GM-Daewoo cars made in Korea, sold in Korea – American cars?
I don’t know the exact number of GM-Daewoo products sold in Korea, but I think I read somewhere that it’s around 150,000 per year, before this global financial crisis.
“Obama’s infatuation with having Koreans buy more American cars coming up…”
I wouldn’t call it infatuation, just economic quid pro quo. Korea has been given a free ride for decades now.
Bear in mind that while Detroit is burdened with labor costs and pension liabilities, Hyundai operates a non-union assembly plant in Alabama. Not exactly a level playing field.
Ironically, however, I believe that there is nothing in the bail out package preventing Detroit from outsourcing, and I wonder whether the Korean auto sector could actually be the beneficiary of this deal?
cm, I don’t consider Hyundais made in Alabama and sold in America American cars. It’s not about where the car is manufactured. It’s about the survival of the US automobile industry. Building a factory in Alabama may have been politically expedient for Hyundai but it only further undermines the competitiveness of the big 3 with their big labor contracts.
“Bear in mind that while Detroit is burdened with labor costs and pension liabilities, Hyundai operates a non-union assembly plant in Alabama. Not exactly a level playing field.”
That’s not Hyundai’s fault, nor is anybody else’s fault other than GM and their big unions.
“cm, I don’t consider Hyundais made in Alabama and sold in America American cars.”
And that’s my point. If Hyundais made in America are considered Korean cars (which Obama is counting as), why isn’t GM-Daewoo cars made in Korea considered American cars?
Why are the GM Daewoo cars owned and designed by Americans, manufactured by Koreans, and rebadged as Cheverolets, counted as Korean cars?
In other news, the Korea Communications Commission has finally decided to scrap the WIPI requirement for mobile phones.
red, I heard about that!
Samsung and LG forgot to make their annual payments to the KCC?
First, WanKon, it’s “craziness” with an i… oi vey…
In Canada, there is a simple rule regarding Canadian Content (music) and radios must play 10% CanCon as dictated by the MAPL rule… Music, Artist, Production, Lyrics. Transfer this over to Hyundai-America and you get American workers, but a Korean design, Korean-owned plant, and Korean profits. Not American. GM Daewoo, on the other hand, qualifies 2 out of 4, so Obama is wrong…
The world is not a level playing field. Why should American consumers pay $1,500 extra to finance the free medical insurance of working and retired auto workers when so many do not have any health insurance at all? I fault both management and the union for the listing ship. I respect the historical achievements of organized labor, but unions can stay relevant only by adapting to an ever changing environment, instead of sticking their heads in the sand and ignoring the reality of cheaper foreign labor.
Thanks… fixed.
“Hyundai-America and you get American workers, but a Korean design, Korean-owned plant, and Korean profits. Not American. GM Daewoo, on the other hand, qualifies 2 out of 4, so Obama is wrong…”
GM Daewoo is owned by Americans, profits flow to American company, business decisions are made by Americans, and Americans have the design control. So by that definition alone, GM Daewoo cars are American cars.
The market share of Hyundai-Kia in America is around 3.5%. The market share of GM-Daewoo cars is around 15%.
The market share of Hyundai-Kia in America is around 3.5%. The market share of GM-Daewoo cars in Korea is around 15%.
http://www.theautochannel.com/news/2008/12/02/275806.html
Here are the numbers on GM / Daewoo auto sales in Korea. (If it will let me post a link).
I am no fan of unions but when it comes to the crippling legacy costs the US auto industry faces, it’s the carmakers who f*cked up 60 years ago.
When labor was negotiating pensions for workers, they proposed a wide-ranging system that would include the auto workers, parts makers, everyone connected to the sector. The risks would be spread across industry and if a worker changed job or company, he would take his pension credits with him (I apologise to any broads reading this). The head of GM at the time, Charlie Wilson, thought this gave to much power to labor and countered with the offer of a company pension.
Such a scheme immediately puts a company in the hole. The company now has to pay a full pension and benefits to everyone and that includes all the 64-year-olds who will only pay into the system for maybe a year. Couple that with a constantly rising dependents-to-worker ratio, and here we are. Companies in countries with national pensions don’t have this problem and so Honda and Toyota and BMW and Hyundai and whoever else you care to mention are not screwed by these legacy costs.
I could go on but you get my drift.
Charlie Wilson didn’t look far enough into the future.
Hmmm, I heard last week when I was in Seoul that BlackBerrys would start selling next year. Probably related…
cm:
“”Shouldn’t GM-Daewoo cars be considered American cars?
The US side considers Hyundais made in Alabama and sold in America, Korean cars, so why not GM-Daewoo cars made in Korea, sold in Korea – American cars?”"
If the first part is true, I think the US should. But that doesn’t mean there aren’t still long standing high tariffs and other barriers preventing US players from reaching their potential in Korea.
Also, how are the profits split between GM and Daewoo? Which gets us into the problem of trying to sell US branded cars in Korea. The more you dig, the worse the relationship looks for American business.
Post, post, post… blackberries work in Korea now. If you buy an American made and put the international SIM, it works. And has for at least 2 months.
redneck, if Honda was able to ramp up the sales in Korea just before the recession hit, why couldn’t any of the big three?
http://www.businessweek.com/globalbiz/blog/eyeonasia/archives/2008/08/honda_emerges_a.html
The high 8% tariff rate is set to disappear with the Free Trade (that’s what free trades are for, to eliminate tariffs). The engine displacement tax is not a trade barrier. Every manufacturers are playing at an even field. Allegations of tax audits on Koreans purchasing foreign cars are propaganda by Detroit’s Big Three, and is at least 10 years out of date.
CM,
I hope you’re correct about the 8% tariff disappearing. I went to the USTR (US trade office) website a few months ago and looked at the letter of the agreement. More or less across the board, I saw 8% tariffs on US imports into Korea, and 2.5% tariffs the other way. I doubt this has changed. Correct me if I’m wrong.
Those are the tariff rates for both countries as it stands now, without a Free Trade agreement. The FTA will eliminate those tariffs. The only plausible argument that the Americans are making is that Koreans will put up another future invisible barrier that will circumvent the FTA. Well then, FTA is all about trust. If you can’t trust your partner, then the FTA is dead.
Free Trade is a two way street.
As I recall Dram Man writing a post about the Mad Cow crowd a few months back, which I thought was an excellent point. If Koreans can’t trust the US trading partner that the Americans will do their best to weed out the Mad Cow diseased beef, then there is no point of wanting more inspections that could never be satisfied anyway, and this whole trade deal is pointless.
The discussion about what should properly be considered and American or Korean car is pretty much irrelevant. What a lot of people don’t realize when they watch their politicians negotiate trade agreements and set tariffs is that politicians really only trade one thing: jobs. They aren’t looking to pick up more tax revenues, they aren’t looking to boost national pride. Politicians trade jobs.
When Alabama woos Hyundai and Toyota to open factories there, they don’t care who designs the cars, who puts their logo on them, and they don’t even care where the final profit margin goes. They want jobs. When America slaps quotas on the number of car imports from Japan, they want to keep Americans working. A car made in Korea, regardless of the label, is providing jobs for Koreans. THAT is the issue, the only issue that matters to the people who negotiate trade agreements and define the terms in them.
This Times article breaks down the hourly pay of Detroit workers and Bible belt workers in the Japanese plants.
Another thing to consider is that most of the GM-Daewoo cars are made for export (see link in comment #12). While (I presume), most of the Hyundai cars made in the USA are sold in the USA.
Detroit+Car czar=The Yugo
Another little anecdote I just remembered: When I became a foreign investor here, I naturally had a bunch of documents to take around and bureaucrats to deal with over the course of a few weeks. From banks to tax officials to immigration oficers to InvestKorea staff, the only thing anyone ever asked as they were processing my documents was “How many Korean people will you hire?”
“most of the GM-Daewoo cars are made for export ”
GM-Daewoo has a 15% market share, and they sell hundreds of thousands of cars in Korea. Exporting to other countries brings cash not just to Korean workers, but also to GM. Performance of GM Daewoo has been one of the few bright spots for GM for the last few years. Without GM-Daewoo, GM’s bottom numbers would have been even worse.
There is news coming out of Washington today that the US congress has reached a $15 billion deal to give emergency loans to Detroit’s Big Three.
I remember right after the financial crisis of the late 90′s in Korea, when the US and Europeans wrapping Korea for ‘subsidizing’ the DRAM industry (Korea’s bailout of Hynix), and the shipping industry (Korea’s bailout of the ship manufacturers).
The US and EU are doing exactly the same thing of what they admonished Korea of doing 10 years ago.
I guess it’s not a ‘subsidy’ after all, it’s now a ‘bailout’.
Obama doesn’t understand anything about trade.
Yet, douches like Linkd supported Obama because of his blind hatred and bias.
It seems, Obama isn’t as dumb as I worried he is.
He basically appointed 2 people who actually somewhat understand the ins and outs of the game, in his cabinet.
He basically said he’ll defer his ambitious, yet unfeasible tax plan.
Thus, we conclude there are huge gaping broken promises in as expected from the endless trains of eloquent lies from Obama’s campaign. Even with Iraq, he’ll be lucky to pull out by next election.
there 3 things about him, that still worry me.
1/ he’s bailing out Detroit.
2/ he’s still opposing FTA with anyone.
3/ he’s going to build roads too hire people.
Let’s hope the two smart guys on his right and his left tell him what to do, instead of him doing the work by himself.
He’s not a smart guy. He’s a good talker, and a raging liberal. The only positive trait about him, is that he seems to listen to people who know what they’re talking about. Or that’s a my misconception.
I’m hoping Jessie Jackson Jr and Rob Bvich will cause some very revealing things to come out about the lying Senator from Illinois.
Jessie Jackson, Jr, and his Dad have shamed the title, Reverend.
They’re using it to misguide black folk, who have high church attendance, but suffer from things like out of proportion stats on domestic violence, single parent families, teenage pregnancies, murder, rape, poverty, illicit drug use, illegal gun ownership and use.
You don’t get this from the opinion section of any newspaper. Wjk will give it to you. However, he has no interest in revealing himself. Being politically incorrect can destroy you in America.
Really? Isn’t it a bit more complex than that? Is the percent of foreign-made components that are bolted in the vehicle by Americans also a factor?
I recall the first “Japanese” cars allowed into Korea (pre-Korean ’97 financial crisis) were American-made Hondas. The US trade rep pushed the Korean gov’t to recognize these made-in-America “Japanese” cars as American – at the time Japanese cars were forbidden in Korea.
GM builds small “Chevys” in Bupyeong-gu, Incheon because they can’t make any money if they build them in Detroit.
That should tell you something…
Hey WangKon, what are you calling yourself now? Is it hard to be an investment banker when there are no more investment banks? People are saying you guys will become like utility companies. Will that make it harder to get laid? What’s the inside scoop?
“Will that make it harder to get laid? What’s the inside scoop?”
Nah… I just went back to telling the chicks that I’m a plastic surgeon…
Cool. Any truth to this?
“You don’t get this from the opinion section of any newspaper. Wjk will give it to you. However, he has no interest in revealing himself. Being politically incorrect can destroy you in America.”
So can being a moron – one who refers to himself in the third person, no less – so watch out…
Dag, too funny and on the money!
Also, check this guys take on the UAW (automobile union) in the states. The automakers in the states should be forced into bankruptcy, IMHO and the union needs to change drastically as well.
“So can being a moron – one who refers to himself in the third person, no less – so watch out…”
Nah, I wouldn’t call it getting destroyed but rather, “fitting in”.
Also, most American cars are pieces of turd bolted together (Buick’s are decent but look like your grand pappies car and the z06 is still world class but that ain’t gonna net you sales). Having owned about 4, I will never touch them with a stick. No one in the world really wants them either.
dry: “Also, most American cars are pieces of turd bolted together”
Nonsense. I drive a Cadilac SRX. It’s a fine car.
Sonagi: “The world is not a level playing field. Why should American consumers pay $1,500 extra to finance the free medical insurance of working and retired auto workers when so many do not have any health insurance at all?”
I agree. The US auto industry needs extensive restructuring, and it needs government policy.
Mizar,
The Cadillac SRX is in fact a very nice car. So is the Ford Mustang. You know the Mustang is the most reliable non-luxury car in American? Some of Detroit’s trucks are nice too.
However, these pin pricks of light are overshadowed by a mediocre overall line-up, particularly in small cars, family sedans and alternative fuel cars. Detroit got absolutely flat footed on hybrids. With the possible exception of Cadillac, Detroit has almost completely ceded the luxury market to the Germans and Japanese. This is inexcusable, considering the high labor and legacy costs Detroit has to support.
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