PALM DESERT, Calif. (Jan. 25, 2010)—Kumho Tire Co. Ltd. has reassured its U.S. tire dealer customers that the firm's recent financial troubles won't affect them.
Speaking at the company's dealer meeting at a resort in Palm Desert, J.H. Kim, president and CEO of the South Korea-based parent of Kumho Tire Co., said the firm faced challenges that had to be dealt with. He alluded to recent news of Kumho Asiana Group's financial struggles, which led to a work-out plan with the South Korean government.
Kumho Asiana is a conglomerate that owns Kumho Tire Co. Ltd. and a number of other subsidiaries.
“I want to make one thing very clear,” Kim said. “Kumho is here to stay.”
The company has produced a workable plan to address its problems—which did not affect the operation of its Rancho Cucamonga, Calif.-based Kumho Tire U.S.A. unit—and that plan “does not involve courts or government handouts,” he said. It is being enacted “without any detriment to our customers. We have sufficient supplies for all our customers.”
Kim said Kumho is, in fact, operating at optimal level—practically 100-percent production capacity—“to have adequate product for all our business partners.”
Several executives of Kumho's U.S. operation said Kim's presence at the dealer meeting is a testament to his increased hands-on involvement in the company as it emerges from its financial setback as well as his vote of confidence in the U.S. unit.
Armand Allaire, as the new man on the block for Kumho Tire U.S.A.—he recently hired on as national vice president of sales after an executive stint at Toyo Tires USA—told customers at the meeting, “I have a responsibility for your results.” Noting a “near-perfect storm” that began for the company last year, he cited a strike by Kumho tire plant workers in South Korea, Kumho Asianic's financial difficulties, and tariffs enacted by President Obama on Chinese-made passenger and light truck tires as reasons that made 2009 a very tough year for the company.
“Yet we delivered well over 8 million units into the U.S. to our customers,” he said.
In response to the tire tariffs, he said Kumho has been moving molds to its plants outside China, especially to its relatively new factory in Vietnam. But told the dealers “Kumho carries the bulk of that tariff. We did not pass it on to you.”
Responding to the parent firm's financial difficulties, Allaire said Kumho Tire has “taken appropriate, proper and ethical” measures and “no one has been left holding the bag—if they're owed money, they got paid.
“All our supply pipelines are intact” and, he said, “àwe're healthy, we have made changes and are moving forward.”