Five more companies rated at bottom on shared-growth index
Seven big enterprises paid relatively little attention to “shared growth” with subcontractors, according an index released on Thursday by the presidential panel on shared growth.
They were Dongbu Corp., Hanjin Heavy Industries & Construction, Hyundai Mipo Dockyard, Homeplus, Hyosung, LG Uplus Corp. and STX Offshore & Shipbuilding, according to the Commission of Shared Growth for Large and Small Companies.
In the commission’s first unveiling of the yearly assessments of 56 major enterprises’ policies for co-prosperity with suppliers for 2011, the seven enterprises were instructed to “improve” their profit-sharing effort.
Six firms have been evaluated as “excellent” in the sector: Samsung Electronics, Hyundai Motor, Samsung Electro-Mechanics, POSCO and Samsung Mobile Display.
The list of “second-best” groups included Hyundai Mobis, Samsung SDS, E-Mart, LG Electronics, Hyundai Steel, Lotte Shopping and LG Chem.
Companies including GM Korea, Hyundai Engineering & Construction and Hyundai Heavy Industries were deemed “ordinary.”
The Lee Myung-bak administration has been keenly advocating shared prosperity between conglomerates and their smaller partners, urging bigger firms to take the lead to help create a level playing field.
With the launch of the shared growth commission in December 2010, the government set the pace for the scheme.
The commission has introduced a “win-win index,” which rates businesses on their devotion to the goal of mutual growth.
The commission assessed the 56 local corporations on how well they distribute their wealth with smaller business partners.
Though the so-called “profit-sharing” program was strongly criticized by major conglomerates for being anti-market, many of them have nevertheless complied with the direction.
Over the past year, major business groups including Samsung, Hyundai Motor, LG, SK and GS have been active devising measures to assist their partner firms’ finance, research and materials procurement.
Samsung Group had pledged a number of measures including a 610 billion won ($540 million) fund, patent rights and improved payment systems to help promote growth in its smaller vendors and suppliers.
The 610 billion won in support were estimated to be used mainly for research & development and other costs needed to promote the health of the vendors, according to the nation’s largest business group.
More payments were offered in cash, and Samsung affiliates pledged to pay their vendors three times a month, up from the current twice a month.
Hyundai Motor Group also had vowed to provide more than $400 million in support for its auto parts producers.
Under its new commitment, the group created a 100 billion won development fund for its suppliers along with an additional 104.6 billion won to its existing 69 billion won emergency fund for its suppliers last year.
Meanwhile, commissioners said they will increase the number of assessment targets from the current 56 to 74 for 2012.
Shared-growth indexExcellent (6 companies)
Kia Motors, Samsung Mobile Display, Samsung Electro-Mechanics, Samsung Electronics, POSCO, Hyundai Motor
Improvement needed (7 companies)
Dongbu Corp., Hanjin Heavy Industries and Construction, Hyundai Mipo Dockyard, Homeplus, Hyosung Corp., LG Uplus, STX Offshore & Shipbuilding
By Kim Yon-se (
kys@heraldcorp.com)
