6 Partner Companies Notify Kumho Tire of Subcontract Termination Contract

[Asia Economy Reporter Kiho Sung] Six partner companies responsible for Kumho Tire's production and logistics handling have notified the termination of their subcontract agreements citing financial difficulties.

According to Kumho Tire on the 5th, six companies in charge of logistics, handling, and raw materials expressed their intention to terminate contracts as of the 31st of last month. This follows the regulation that requires notifying one month in advance if there is a reason for early contract termination. Accordingly, the contracts between Kumho Tire and the partner companies are expected to remain valid until the end of this month.

The companies cited a decrease in subcontract volumes and financial difficulties as reasons for contract termination. Consequently, the employment of approximately 720 non-regular workers affiliated with the subcontracting companies is also expected to be affected.

If Kumho Tire signs contracts with new companies, employment succession will occur, but if the contract is delayed, the unstable situation may be prolonged.

Earlier, the non-regular workers' union filed a claim seizure and collection application against Kumho Tire in court, resulting in the seizure of the corporate account on the 30th of last month. The company proposed resolving the issue through a special consultative body between non-regular workers and management, but the union insists that discussions on regular employment conversion should come first, raising concerns that the liquidity crisis may be prolonged.