Free market economics are a simple process. Or so they say. Dive in, and whoever survives, survives. Let the market decide. According to the pure tenets of free market economics, it’s important that the government shows no favoritism. Yeah, right.
The Korea Times reports that President Lee Myung-Bak is showing more than just interest in Hyundai-Kia. He shows up there on a regular basis. Since he took office in 2008, the Prez has dropped in five times on Hyundai factories. How many times has he visited facilities at Samsung, South Korea’s biggest chaebol in the same time frame? Once.
Hyundai? Soon after the Prez’ inauguration, he went to see Hyundai’s factory in Gwangju. Then, he went to the one in Beijing , then Chennai. Then, when he wanted to talk about the electric car’s role in the car industry, where did he hold this meeting? At Hyundai’s research center in Namyang, Gyeonggi Province. This man loves car factories!
“I don’t know whether or not the President really prefers Hyundai to the other groups, including Samsung. But his past activities cause some to scratch their heads since it is true that he once led a Hyundai company,” a Seoul analyst said.
“Some contend President Lee is not business-friendly but is Hyundai friendly. In other words, they are curious why President Lee is in a love affair with only Hyundai although other groups also flirt with him.” Maybe because he loves the thrill of car factories?
The Prez tried to hush his critics by offering a pardon to Lee Kun-Hee, the head of the Samsung Chaebol, after a scandal involving slush funds. I know a lot of our B&B think that the government helps South Korean car manufacturers get the edge over their competition. Are these frequent visits a smoking gun? Or is this really any different to Renault being part owned by the French Government? The US government bailing out and owning most of GM and Chrysler? Volkswagen being part owned by Lower Saxony? China owning most of their large auto companies outright?
What say you?
The U.S. government’s ownership of GM and Chrysler isn’t due to their love of the American auto industry, it’s due to the fact that a Democrat President and his Democrat-controlled congress owe a lot the UAW for being where they are today. Sort of a scratch my back and I’ll scratch yours thing.
I somehow doubt an American president or congress of any party would allow two corporations that together employed more than 300,000+ workers to simply die in the middle of a recession with already-crippling unemployment.
Let’s not forget that the president who signed legislation directing the United States government to purchase assets and equity from financial institutions to keep the financial sector afloat was not a member of the Democratic party.
In both the bank and auto bailouts, the primary motivation for such desperate measures was avoiding a precipitous escalation of the economic downturn, not repaying voting blocs for their loyalty.
“I know a lot of our B&B think that the government helps South Korean car manufacturers get the edge over their competition.”
Think? Think? Really Cammy?
Asia is a very group oriented place and then there are subgroups within society. Lee is probably a protege of Hyundai. It includes and goes beyond the concept group think.
I for one think national governments should help indigenous brands at least in their own countries. Maybe not in the bailout scale seen with GM and Chrysler, but some direct and indirect support like the Korean and Japanese automakers enjoy from their respective governments.
At the same time, I believe not much good can come from state owned enterprises such as the auto giants in China and several Russian automakers. Lost in bureaucracy, they struggle to innovate. And that’s what’s likely in GM’s future if they stay under government control.
Up until 4 years ago I spent a fair bit of time in Seoul. It’s abig city with bumper to bumper traffic and I very, very rarely saw ANY non-Korean cars. Just the odd BMW or Mercedes. The reason? Tariffs.
Something tells me that Myung-Bak’s coziness with Hyundai is much more acceptable in Korea than Obama’s coziness with GM is in America. One company is a life saver to its people; the other is a rock around the neck.
That said, all political involvement with private enterprise is like sleeping with your cousin after a few beers. Enjoy it now, because in the morning you are really going to hate yourself.
But but…my cousin’s cousin whom I met briefly a year ago isn’t related to me. Is it ok that I find her kind of hot? =0