PROTESTS AND A LIQUIDITY CRISIS
A Prewave Case Study
South Korea, 2018
Company Acquisition and Protests
Fluctuations in the financial strength and condition of Kumho Tire Co. led their main creditor, the Korea Development Bank, to look for FDI to stabilise the company.
Kumho Asiana Group purportedly need to raise $850m to outbid Double Star, a Chinese state-owned conglomerate best known for shoe production. If the deal goes ahead, Double Star stand to gain a large market share of tire sales in China as well as Korea.
Questions regarding Kumho’s future began in 2015 and Prewave followed the progress in realtime as well as predicting certain events that were to unfold.
Timeline of Events
After rising tensions with Kumho Tire Co in talks to sell to a Chinese conglomerate and unpaid wages from the beginning of January, 4000 workers and union members hold a demonstration and 24-hour walkout of three factory sites. Creditors set an end-of-the-month deadline for the union to accept the deal.
Union members initially threaten to go on strike across all the factory sites of Kumho and then officially announce their intention. In line with Prewave’s high risk alert, a date is set for March 15th.
Prewave deliver a medium risk alert for a strike before this date.
Kumho workers stage a partial strike, as union officials mediate with the KDB
PRE SIGNAL MONITORING
Prewave continue monitoring the situation as it transpires and compiling and further analysing data from grassroots level. With major consequences along the supply chain, Prewave run systems around the clock.
PREDICTION OF RISK EVENT
Kumho workers and union members go on full strike, costing the company huge losses in business interruption
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