Korea's corporate giants Samsung and Hyundai drag down natio

Time: 2016-10-18 13:43
KOREA's Samsung Electronics' smartphone debacle and strikes at Hyundai Motor Co are among factors dragging down the economy, says Bank of Korea's governor Lee Ju-yeol, reports Bloomberg.
Trade Minister Joo Hyung-hwan last month urged Hyundai Motor workers to stop their "unjustifiable" strike, return to work, and help efforts to revive exports.
National mobile phone and electronic component exports fell 34 per cent in September year on year, government data show. That's when Samsung recalled its signature Galaxy Note 7 following reports of the new phones catching on fire.
Overseas shipments of cars fell 24 per cent the same month, which is when Hyundai's union workers went on full strike following a series of partial strikes that had disrupted production.
The two sectors account for one-sixth of total overseas shipments, which fell six per cent in September.
Hyundai Motor workers staged strikes from July to September, demanding higher pay. The worst labour disruption in more than a decade led to a production decline of about 140,000 cars.
Hyundai union workers went back to work earlier this month as negotiations resumed, and the results of a vote on a wage package will be released later.
Park Sang-hyun, chief economist for HI Investment & Securities, expects the Hyundai Motor and Samsung Electronics troubles to cut fourth-quarter export growth by 3.4 per cent.
Lee Mi-seon, an analyst for Hana Financial Investment, estimated that Samsung's products account for more than 60 per cent of South Korea's mobile phone exports.
If Samsung's mobile phone exports decline 30 to 40 per cent in each quarter of the next two quarters, it could lower GDP in 2017 by 0.15 to 0.2 percentage point, according to Mr Lee.
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