feb17 cacci Soo Young

Information about feb17 cacci Soo Young

Published on September 11, 2007

Author: Arundel0

Source: authorstream.com

Content

Challenges for Restructuring in Korea:  Challenges for Restructuring in Korea Feb. 18, 2005 Lee Soo Young Chairman Korea Employers Federation Slide2:  The Economic Situation in Korea before and after Financial Crisis Main Elements of Corporate Restructuring Problems of the Corporate Restructuring Challenges: Directions to Improve Corporate Restructuring Contents The Economic Situation in Korea before and after Financial Crisis:  The Economic Situation in Korea before and after Financial Crisis Scenery before 1997 :  Scenery before 1997 High growth (6~8%) and Volume driven economy No consideration of cash flow, No RISK concept Fleet-type management Multi legal entities in one group, summarized : Cross debt guarantee and Cross shareholdings Large volume of short-term foreign borrowings overestimated exchanges rate $=₩800 Too big to collapse perception Warning unnoticed : 11 large conglomerates bankruptcies during 1997 Viewed rather as an economic cycle than inefficient business structure Unconscious market watching Lifetime employment practice, social safety net never questioned 4 At the end of 1997 :  At the end of 1997 $35 billion reserve Stagnant export, an accelerated withdrawal of short-term F/X loan from Korea Government’s defend of local currency Won depreciation with $35 Billion, resulted in fast dried-up of F/X. Failed to declare emergency, and did not admit what we were doing wrong No precise concept of what the market would do 5 What the collapse did for the Korean economy :  What the collapse did for the Korean economy With IMF accord, local currency Won depreciated to $=1,800 from $=800 over night. Making Dollar borrowers very difficult to revolve Bank loans to cover such a local currency demand drove interest rate to 20~24% from 9~11% P.A. Economy quickly contracted Many Chaebols and companies’ bankruptcies (※ Chaebol : proper noun for Korean Conglomerate) Large number of workers laid off At the beginning of the crisis, viewed as mis-management of F/X, But gradually realized fundamental economic structure problem 6 2. Main Elements of Corporate Restructuring:  2. Main Elements of Corporate Restructuring Analysis:  Analysis Analysis on the causes of the economic crisis The initial discussion the problem of exchange rate and foreign currency management Later corporate insolvency weak financial industry – 'collateral rather than cash flow' mismanaged government policies Vicious Circle Insolvency of companies → insolvency of the financial industries → the financial crisis → Insolvency of companies 8 Measures:  Measures Multilateral measures taken to overcome the crisis Reform in four sectors Financial Corporate Labor Public Corporate structural adjustments being a very critical task from the long term perspective Bottom line – guarantee sustainable economic growth 9 Reform of Chabols:  Reform of Chabols The broad structural reform of Chaebols demanded by IMF and IBRD Combined financial statements International accounting principles Introducing : auditing committee and outside board of directors Class action suit Implementing more flexible labor market policies Five principles of corporate restructuring Improving corporate financial structure : min. debt ratio 200% Selecting core businesses Eliminating the cross guarantee Improving transparency in business management 10 Reform of Chabols (II):  Reform of Chabols (II) Concrete measures taken to carry out corporate restructuring Top five Chaebols : 'Big Deal‘ (voluntary structural adjustment) Chaebols next to the top five : 'Workout' program (creditors-initiated structural adjustment) 11 Problems of the Corporate Restructuring:  Problems of the Corporate Restructuring Problems of the Corporate Restructuring:  Problems of the Corporate Restructuring Policies lacking reasonable grounds were implemented at the same time, causing considerable level of trials and errors Indiscriminate standards were applied to every company, not reflecting size and characteristics of each industry The government intervened forcibly instead of corporate restructuring by needs Rigidity of the labor market made it difficult for a company to adjust employment Weak companies are difficult to restructure 13 Problems of the Corporate Restructuring (II):  Problems of the Corporate Restructuring (II) Stability and profitability has improved since financial crises, but Bi-polarization (The rich get richer, the poor get poorer), No further investment, No willing to take risk 1997 2004 $ reserve (Bil $) 20.4 199.1 Export 136.2 230.7 Import 144.6 203.5 Manufacturers’ Debt Ratio 396% 123% (’03) Manufacturers’ Profitability* -0.3% 11.9%(3Q) Top 5 16.7% Others 7.5% (Profitability = Ordinary Profit/Sales) Unemployment 2.0% 3.5% 14 4. Challenges: Directions to Improve Corporate Restructuring:  4. Challenges: Directions to Improve Corporate Restructuring Directions to Improve Corporate Restructuring:  Directions to Improve Corporate Restructuring The corporate restructuring experts should be reared under the market mechanism Corporate restructuring needs to be established as an everyday life matter rather than events The importance of good corporate governance Employment adjustment must be the last resort Stability in wage and industrial relations is needed 16 5. Conclusion:  5. Conclusion Changing corporate environment 17 Past : Companies focused on growing size for the economy of scale, as big fish ate up small fish Present : Only fast fish can survive, but slow fish will die Restructuring is an inevitable choice for a company to make it adjustable to the speed of changes in the environment. 5. Conclusion:  5. Conclusion 18 ' Specifies fittest to environment will survive, not the strong or intelligent ones.' 『Origin of Species by Darwin』

Related presentations


Other presentations created by Arundel0

Black Holes powerpoint
07. 10. 2007
0 views

Black Holes powerpoint

Physics Presentation
16. 10. 2007
0 views

Physics Presentation

Bangladesh
12. 10. 2007
0 views

Bangladesh

Afrodite Sevasti
13. 10. 2007
0 views

Afrodite Sevasti

Industrial Revolution
22. 10. 2007
0 views

Industrial Revolution

American Imperialism
22. 10. 2007
0 views

American Imperialism

i2 icfa sep05
11. 09. 2007
0 views

i2 icfa sep05

Deok Ryong Yoon
11. 09. 2007
0 views

Deok Ryong Yoon

R1 1
11. 09. 2007
0 views

R1 1

i DMSS
11. 09. 2007
0 views

i DMSS

FinnishChemicalsinfo rmation
15. 10. 2007
0 views

FinnishChemicalsinfo rmation

A Nieto Nuez
26. 11. 2007
0 views

A Nieto Nuez

bio435 660 chap8 pt2
07. 12. 2007
0 views

bio435 660 chap8 pt2

mini3
11. 12. 2007
0 views

mini3

lecture 29
25. 10. 2007
0 views

lecture 29

slidepres
29. 10. 2007
0 views

slidepres

research methods schultz
07. 10. 2007
0 views

research methods schultz

RA2002
24. 10. 2007
0 views

RA2002

Physics with RICH detectors
15. 11. 2007
0 views

Physics with RICH detectors

Chap 03
17. 11. 2007
0 views

Chap 03

hogg
03. 01. 2008
0 views

hogg

genrepatrickgilmour
15. 10. 2007
0 views

genrepatrickgilmour

Rabies 2
19. 11. 2007
0 views

Rabies 2

weight control program se
04. 01. 2008
0 views

weight control program se

Water Everywhere
02. 01. 2008
0 views

Water Everywhere

Chang Kyung Sup
11. 09. 2007
0 views

Chang Kyung Sup

AD2002
05. 01. 2008
0 views

AD2002

athans99
16. 02. 2008
0 views

athans99

Neologismen in STAR WARS
19. 02. 2008
0 views

Neologismen in STAR WARS

F02
20. 02. 2008
0 views

F02

2006 National Traffic 101
30. 10. 2007
0 views

2006 National Traffic 101

younginvestigators
27. 02. 2008
0 views

younginvestigators

capacity
29. 02. 2008
0 views

capacity

BTS statement on mesothelioma
11. 03. 2008
0 views

BTS statement on mesothelioma

04 ICG report
20. 03. 2008
0 views

04 ICG report

chapter13part2
07. 04. 2008
0 views

chapter13part2

mesmuses methodology
20. 06. 2007
0 views

mesmuses methodology

Mar02 Workshop Sakallah
20. 06. 2007
0 views

Mar02 Workshop Sakallah

manifesto pldi
20. 06. 2007
0 views

manifesto pldi

lisb overview
20. 06. 2007
0 views

lisb overview

Lesko June01
20. 06. 2007
0 views

Lesko June01

350LEC
09. 04. 2008
0 views

350LEC

bogota final
13. 04. 2008
0 views

bogota final

naccl workshop canada2003
20. 06. 2007
0 views

naccl workshop canada2003

Musy
20. 06. 2007
0 views

Musy

miniboone kektc6
20. 06. 2007
0 views

miniboone kektc6

millennium mix
20. 06. 2007
0 views

millennium mix

MICRO III Aula4
20. 06. 2007
0 views

MICRO III Aula4

MICRO III Aula10
20. 06. 2007
0 views

MICRO III Aula10

MICRO III Aula1
20. 06. 2007
0 views

MICRO III Aula1

morocco
24. 10. 2007
0 views

morocco

wordsplash11th1
14. 04. 2008
0 views

wordsplash11th1

Lucas Foods Case Analysis
16. 04. 2008
0 views

Lucas Foods Case Analysis

opening research data lifecycle
19. 06. 2007
0 views

opening research data lifecycle

Oersted
19. 06. 2007
0 views

Oersted

file45164
17. 04. 2008
0 views

file45164

gutierrez 2002
22. 04. 2008
0 views

gutierrez 2002

thickett
17. 10. 2007
0 views

thickett

rias uk
28. 04. 2008
0 views

rias uk

potomacroundtable Presentation
28. 12. 2007
0 views

potomacroundtable Presentation

how do i know wetland
03. 01. 2008
0 views

how do i know wetland

Oceans2005
07. 11. 2007
0 views

Oceans2005

wblocuniv
11. 09. 2007
0 views

wblocuniv

Secrets Presentation
07. 01. 2008
0 views

Secrets Presentation

Trinidad Tobago
14. 02. 2008
0 views

Trinidad Tobago

MICROIII Aula9
20. 06. 2007
0 views

MICROIII Aula9

MICRO III Aula8
20. 06. 2007
0 views

MICRO III Aula8

Micro III Aula13
20. 06. 2007
0 views

Micro III Aula13

MICRO III Aula11
20. 06. 2007
0 views

MICRO III Aula11

GKim
11. 09. 2007
0 views

GKim

OPSPanama
22. 10. 2007
0 views

OPSPanama

East Asia
25. 03. 2008
0 views

East Asia

NORDU net 2003P Villemoes Talk
19. 06. 2007
0 views

NORDU net 2003P Villemoes Talk

Nygren TPC symposium
19. 06. 2007
0 views

Nygren TPC symposium

M Barbi
20. 06. 2007
0 views

M Barbi

vaitkus
10. 10. 2007
0 views

vaitkus

fpgd040225
29. 10. 2007
0 views

fpgd040225

Future of PR Iran November 2005
24. 02. 2008
0 views

Future of PR Iran November 2005

boj
09. 10. 2007
0 views

boj

Lacroix
15. 11. 2007
0 views

Lacroix

longo2
03. 01. 2008
0 views

longo2

dd259
19. 10. 2007
0 views

dd259

America in World War II
04. 01. 2008
0 views

America in World War II

Digitization Projects
11. 09. 2007
0 views

Digitization Projects

Mikkel Olesen
20. 06. 2007
0 views

Mikkel Olesen

from powerful to personal week2
22. 11. 2007
0 views

from powerful to personal week2

young soo
11. 09. 2007
0 views

young soo

Clayton
22. 10. 2007
0 views

Clayton

PL Asia Slides
11. 09. 2007
0 views

PL Asia Slides