Today Kumho Tire Inc. made a pretty important announcement – one that doesn’t speak highly of the liquidity situation that its parent company currently finds itself in. Due to a temporary cash shortage in the company, many December salaries are being delayed. The $11 million worth of salaries is scheduled to be paid back in early January when Kumho Asiano Group receives payments from clients and replenishes its coffers. The parent company blames the salary delay on a large debt payment made at the end of the year, news which sent shares in Kumho Tire tumbling almost 13%.
Kumho manufactures OE tires for companies like Hyundai and Kia, and like other tire companies, was hit hard but the auto industry recession and vehicle production cuts. On top of the precarious economic situation, Kumho’s parent company also has stakes in other interests and was facing debt payments that had to be made. They have declined to comment officially about this latest incident.
We’ll keep an eye on the liquidity situation at Kumho and hope that everything can get sorted out. It would be a shame to see dips in production on wholesale Kumho tires, which include passenger, performance, light truck, SUV, competition, and commercial truck tire lineups.
Filed under: Kumho Tires, Tire News, Kumho Tires
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