Saturday, December 27, 2014

Serfdom In The 21st Century-- Korea


Too big to fire

My favorite part of the on-going Korean Air scandal is how it exposed the relationship between the plutocracy and the working class. First, meet Cho Hyun-ah, an heiress-- daughter of Korean Air chairman Cho Yang-ho. Part of her patrimony, apparently is an executive vice presidency at the airline-- and an attitude towards the little people that would make Leona Helmsley blush. As for her very own little people, Cho flew to Hawaii last May to give birth to twin sons so that they would have U.S. citizenship-- something wealthy South Koreans like to do... just in case something goes wrong (and so that they kids don't have to serve in the Korean military).

OK, first the facts in the more recent scandal that has led to Cho be fired by her embarrassed father. She was flying-- first class, of course-- from JFK back to Korea on December 5. She flipped out when a flight attendant handed her macadamia nuts in a bag instead of in a bowl. People in first class get their macadamias in bowls, while the peasants get their bags of peanuts in bags. She went nuts! She summoned the senior steward in charge and demanded an explanation, which didn't satisfy her. So she ordered the plane back to the gate so the flight attendant could be thrown off the plane. And the plane's captain obeyed! Ah... the power and arrogance of Korea's chaebol (family-run mega-conglomerates). Cho's family is especially hated in Korea, and Hanjin, the parent company of Korean Air, got its start serving the U.S. military in the 1940s. Several years ago, Cho's brother, Won-Tae Cho, another spoiled brat and another executive vice-president of the airline and other Hanjin subsidiaries, was investigated by police for shoving an elderly woman who confronted him about his reckless driving. Earlier the patriarch himself, who is a well-known crook, was convicted, along with his own father brother, of tax evasion.
The abused flight attendant who was attacked and berated by an airline executive when he failed to serve her nuts in a bowl on a flight from New York to South Korea is sharing his story.

Screaming Cho Hyun-ah, a senior vice-president at the airline and daughter of the airline's chairman, angrily demanded the removal of the crew member, Park Chang-jin, from the flight when he gave her macadamia nuts in a bag.

She then forced the Incheon-bound flight to taxi back to the terminal at New York's JFK Airport to kick the junior flight attendant off the plane.

Now, Chang-jin has revealed that several officials from Korean Air asked him to deny the incident ever happened.

'People who haven't experienced will not understand that feeling of being insulted and shamed,' Chang-jin told a South Korean television station on Friday.

He said after being berated by  Hyun-ah, he and a fellow flight attendant actually dropped to their knees in front of the woman begging for forgiveness, this as she 'poked the back of his hand with a corner of the flight manual book several times.'

Because she is the daughter of the chairman, he says he had no choice but to follow her orders, returning the plane and deboarding, taking a separate flight home.

  When he got home however, 'five to six officials from Korean Air came to visit his home every day and asked him to give a false account to authorities of what happened.'

What's more, they 'asked him to tell investigators that Cho did not use abusive language and that he voluntarily got off the plane.'
There was talk about Cho being arrested and the family firm did all it could to paper over the whole incident and contain the damage. The Straits Times was eager to give their side of the story.
While it is easy to write her off as another hoity-toity power-abusing chaebol heiress, the hotel management-trained Ms Cho undertook initiatives to improve Korean Air, which she joined in 1999.

Under her charge, the airline had a major image overhaul, complete with new uniforms, redesigned cabin interiors and improved inflight service and duty-free offerings. In 2005, it achieved US$158 million (S$207 million) in duty-free sales, reportedly the highest-ever by any airline at that time.

This figure is expected to hit US$190 million this year, according to travel retail magazine The Moodie Report, which described Ms Cho as a "highly driven individual by her own admission" in a 2006 interview.

Ms Cho was also credited with revamping the inflight magazine and giving it a much-needed feminine touch. She also spent three years convincing La Mer to join the airline's duty-free offerings-- a first for the luxury skincare brand.

"I try to be an ambassador to introduce new and great brands to Koreans who travel," she told Moodie Report.
Cho hasn't been arrested yet but... that could actually happen. A transport ministry official has been arrested for helping with the family coverup. I'm sure he assumed that was part of his job. He's in jail now. The relationship between government functionaries and the families that run the chaebols is, at best, unhealthy and the Cho incident is an opportunity for reform groups to shed light on the sleaze that permeates the whole system.
A local civic group asked the prosecution Friday to look into suspicions that government officials got free upgrades from the country's top airline, Korean Air Lines Co., which is at the center of controversy over an air-rage incident.

...The civic group's move came after allegations surfaced that several ranking transportation ministry officials were bumped up to business class regularly for free.

"Such allegations could be interpreted as bribery," People's Solidarity for Participatory Democracy said in a press release, adding that Korean Air executives suspected of giving such privileges to ministry officials could face breach of trust charges.

The ministry said it will launch an internal inspection into the mounting allegations and will take appropriate disciplinary measures against those who received free upgrades.

We just updated this post at my travel blog with a piece by Tim Wu on why the U.S. airlines go out of their way to make their customers suffer. Sure, it's for profit... but there's even more. Worth the click.

UPDATE: Prison Sentence

On February 12, Cho Hyun-ah, the spoiled Korean Air heiress was sentenced to a year in prison, possibly a message to out-of-control elites in that country.
A Seoul court said Cho, 40, was guilty of forcing a flight to change its route, obstructing the flight's captain in the performance of his duties, forcing a crew member off a plane and assaulting a crew member. It found her not guilty of interfering with a transport ministry investigation into the incident. Cho pleaded not guilty and prosecutors had called for three years in prison.

...Cho's high-and-mighty behavior, dubbed nut rage, caused an uproar in South Korea. The incident was a lightning rod for anger in a country where the economy is dominated by family-run conglomerates known as chaebol that often act above the law. The sentencing did not entirely douse that outrage: One year in prison is a "bit short," said Jo Young-sang, 24.

Chaebol chiefs convicted of white collar crimes have typically received suspended prison sentences and later on, presidential pardons. Courts have often acknowledged the contribution of such industrialists in transforming South Korea from an economic backwater into a developed economy.

But the Cho case indicates South Korean society is less indulgent of the second and third generation members of high-profile business families. Heirs to fantastic fortunes such as Cho quickly ascend the executive ladder but few believe their rise is based on merit.

"Most second or third generations of chaebol in South Korea think of themselves as members of royal families or in the special aristocratic class. So they think they can do whatever they want," said Yonsei University psychology professor Whang Sang-min.

...The court sentenced Yeo Woon-jin, a Korean Air executive who pressured employees to lie about the nut rage case, to eight months in prison.

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