Korea - The next ten days are expected to be critical for the on-going plight regarding Korea Foundry Cooperative Association’s suspension of goods deliveries.
As the association may choose to pause production as a last resort, large enterprises are now under pressure to take an unequivocal stance on the issue.
Many forecast the situation to be resolved in one way or another as the government is likely to act on measures to entangle the situation where SMEs’ group actions are spreading from the foundry industry to now ready-mixed concrete, asphalt-concrete, and the plastic industry.
According to industry insiders on March 17, the Korea Foundry Cooperative Association (KFCA) has been revealed to be considering the possibility of pausing production next month, which means that this is to be the last negotiation period. Although KFCA had planned a third delivery suspension for next week, the association withheld this plan and set a long enough negotiation period of ten or more days.
KFCA intends to settle the situation if the large enterprises suggest a raise of unit costs to the point where it can negotiate forward.
Large enterprises are encumbered by the suspension of goods delivery as well as the public opinion which is in amity with the small and medium sized enterprises.
In addition, the unit cost raise plan recently revealed by Hyundai Motor, which had been used as a barometer in price negotiations between large size enterprises and foundry SMEs, is expected to serve as a salve for the situation because Hyundai Motor’s move to raise unit costs has encouraged others to do the same as well.
