Halla Group collapses, Part 2

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ported by Ford Motor Company," said Park at the company Christmas party Saturday evening when shown a news wire dispatch of the parent company failure. "There is no threat to HCC in Belleville. We are not affected by this. The rest of the Halla Group has been in trouble for some time. But, since 1986, Ford has controlled our climate control company." Officials for Ford Motor Company in Detroit, Mich., were unavailable for comment Saturday evening. The shipbuilding and auto parts-maker Halla Group, South Korea's 12th-largest conglomerate, went under Saturday after defaulting on the equivalent of $312 million Cdn in loans over the last two days, creditor banks said. It was the first corporate failure since the International Monetary Fund attached strict conditions to its $60-billion US rescue package for South Korea's floundering economy Wednesday. "Halla could obtain no more funds because banks refused to provide new loans and began calling in the loans," said Park Sungsuk, vice-chairman of Halla Group. Belleville plant managing director Yong Hwan Park told The Intelligencer there are 17 "sister groups" under the Hatiairorporate umbrella. Of that number, Belleville's HCC Canada Inc. is an automotive air conditioning and heating component manufacturer that joins two other divisions that are safe from the Halla collapse. "Halla Electronics Corporation, which makes electronic dashboard components for Ford, and KAMCO, a company that makes starter motor components and is owned by the German company, Bosch, are subsidiaries that are not affected by the problems of the Halla Group," said Park. He said the Belleville plant, which announced plans last week to expand its production facilities by three-fold in the next 18 months, will continue with its expansion. He said company officials would not make any announcements Saturday night to employees at the Christmas party, but would issue a statement Monday assuring them that the company's Belleville operations are stable. Company officials said last week the Belleville Halla plant expansion is required to meet new contracts the company has won to supply air conditioning and heating components for GM and Ford sport utility vehicles. The contracts are for vehicles including GM's Tahoe/Yukon and Jimmy/Blazer sport utility trucks and for the Ford Explorer into the year 2000. During the company Christmas party Saturday evening, an employee led the dinner in grace prayer. "We pray, God, that you continue to bless us with prosperity." Company employees applauded and toasted Halla's success in the new year. The IMF conditions for the bailout announced Wednesday slower economic growth, tightened credit and higher interest rates -- raised the prospect of mass-layoffs, labor unrest and more bankruptcies. The conglomerate owed the equivalent of $9 billion, mainly from borrowing to finance a multibillion-dollar shipyard on the southwestern coast in 1992. Its troubles came to a head when Southeast Asian financial turmoil hit South Korea, sending interest rates higher and making already debt-ridden South Korean banks reluctant to lend. This month, saying it was badly strapped for cash, Halla announced it would lay off half of its 6,000 workers. Hyundai South Korea's largest conglomerate - - provided funds to keep Halla afloat in the last months. But in a sign of the turmoil under the bailout prescription, Hyundai said today it will no longer assist Halla. Meanwhile, the central Bank of Korea said it received the first $5.5-billion disbursement today from the IMF. Funds will be parceled out following periodic IMF reviews of the economy. P

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