'Economic Trouble Ahead?'

Samsung Chairman Lee warns of a crisis

Samsung Group Chairman Lee Kun-hee said Korea needs to brace for economic troubles ahead in an era of mounting global competition.
Lee issued a warning on March 9, "Not only Samsung Electronics but also the entire nation could face economic difficulties in five and six years."He told reporters after participating in a ceremony for signing a transparent social contract.
Lee's comment made headlines since the tycoon of Korea's No. 1 conglomerate, who rarely speaks with the press, publicly made his call for bracing for economic problems ahead.
His remarks came as Samsung Electronics and other Korean giant companies have seen their profits declining sharply in recent months.
Lee indicated that Samsung Electronics is no longer competitive in the home appliance business and may be forced to relocate the struggling industry to developing nations since it cannot compete with other foreign nations with cheap labor.
Samsung Group officials said that the chairman's comment implies that Samsung Electronics plans to raise production of home appliances in factories abroad, while in Korea it would put more energy into research and development and production of locally sold goods.
In January, he expressed worries that the Korean economy is in a dire situation as it is being ``sandwiched亮 between high-tech Japan and rapid-developing China.
In January, his warning that Korea is "nut cracked "by front-runner Japan and fast-chasing China also received a prominent coverage of the press.
In 1993, Samsung Chairman Lee issued a "wake-up" call to his executives and staff members that all things, except wives and children, should change, causing a stir at that time. However, his latest warning as the tycoon of a conglomerate responsible for more than 20 percent of Korea's annual exports, may be construed not only as a warning that the current economic situation could face troubles ahead, but also as a kind of complaints against government policies, analysts say.
Lee's remark has touched off a wide range of pros and cons surrounding the national economy.
On March 13, Cho Dong-won, director general of economic policies at the Ministry of Finance and Economy, told a radio interview, "I concur with Chairman Lee's warning that our mainstay industries might fall into trouble in the next five to six years unless the entire nation is on an alert. " "Now is the time we have to worry about our economic growth potential, and the government itself tries to do its best even though the issue cannot be solved in a couple of days,"he said.
Hyundai Motor Chairman & CEO Chung Mong-koo also echoed Samsung Group Chairman Lee's view on March 16. He said in a statement issued prior to the 2007 general meeting of Kia Motors shareholders, "The global automobile industry is a unlimited competition to the extent that the winner of the future cannot be anticipated, and Japanese companies are increasingly restraining us, while China is chasing at a fast pace to overtake us,"Meanwhile, Samsung Chairman Lee is to leave for Europe in late March to make an inspection tour on the mobile phone market there, and he then will tour Beijing to attend the fifth SportsAccord convention there April 23 ~ 27.
As one of the two Korean member of the International Olympic Committee (IOC), Chairman is to promote PyeongChang's bidding for the 2014 Winter Olympics. Lee toured PyeongChang where he met with an IOC evaluation delegation which inspected the 2014 Olympic Winter Games candidate city Feb. 14-17. nw

Samsung Group Chairman Lee Kun-hee