NORTH AMERICAN REPORTS
Global Families
The senators' concerns are not unique when it comes to the chaebols.
"The only difference between the chaebols and the government in Korea is really still only the spelling of the word," says John Schuetz,
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| 1,250 workers are employed at Samsung's existing Austin fab. |
However, Frank Vargo, vice president, international economic affairs for the National Association of Manufacturers, says the Korean financial crisis of 1997 served to appropriately dilute the influence of the chaebols:
"Corporate rigidity was one reason the financial crisis was as rough as it was," he says.
Schuetz says two giant investments like this are sure to have an influence on trade negotiations.
Outside of the trade talks, analyst Thomas Ryard of World Markets Research Center says the Hyundai scandal might bump up the company's international timetables.
"What's happening in South Korea now with Hyundai only underscores their need to be less dependent on S. Korea – the labor unrest is growing, there are many strikes, and now this latest corruption problem," says Ryard. "If anything, this latest event will just accelerate their efforts to get closer to the markets where they want to be, like the U.S. and Europe."
But if the South Korean labor force reacts strongly, he says, the ripples could be felt far abroad.
"If this latest corruption scandal translates to labor unrest – people striking because they are upset over the bribery and the corruption – there is the possibility that it could cause engine plant shut downs in Korea. And Korea is a major engine supplier. So, there could be some disruption in the supply chain. Other than that, I think this is going to have national but not international repercussions."
