Kia Stock Tanks On CEO Fallout News
Trading Markets reports that Kia shares dropped five percent yesterday after news emerged that its CEO would be stepping down. Unnamed analysts assure us that Chung Eui-sun left his position due to "poor earnings." But it's more likely a PR move for the Chung family. Ei-sun's father Chung Mong-koo narrowly held onto his position as Chairman of Hyundai-Kia after an embezzlement conviction and stockholder revolt. The Kia presidency is likely seen as an acceptable loss in exchange for some public goodwill, as Chung Ei-sun was widely expected to succeed his father at the top of the Hyundai-Kia food chain. Regardless of the weird Korean nepotism angles, Kia is in some financial trouble at the moment. Just before the announcement of Chung's resignation, Goldman Sachs released warnings about Kia's productivity and profitability. Is it me or would this make a terrific TV series?
More by Edward Niedermeyer
Comments
Join the conversation
Hyundai owns 50% of Kia and won't let it fail. Operations may be further integrated to cut costs, as a guess. Hopefully, the better Hyundai auto quality rubs off onto Kia and not the other way around.
"Hopefully, the better Hyundai auto quality rubs off onto Kia and not the other way around." Ah, but that is not the normal way it works, is it?
That's what has me worried, Landcrusher. Look at Daimler-Chrysler. I was in my buddy's garage helping him on a car repair ("quality man time") and we were talking about the Germans buying Chrysler (back when it was very fresh news). As we repaired his mother's POS Dodge four cylinder. Again. Again. Again. My pal said "murphy's law - they'll end up with Chrysler engineering, quality control and car development, and Mercedes styling.... instead of the other way around". Unfortunately, that was way too prescient. And that's what happened, more or less.