(EDITORIAL from the Korea Herald on July 18) - Spin doctors

The recent confusion over the announcement of Ericsson's investment plan in Korea
is an international embarrassment, the like of which should not be repeated.
On July 12, President Lee Myung-bak, visiting Sweden to mark the 50th anniversary
of diplomatic relations between Korea and Sweden, met with the Ericsson CEO, Hans
Vestberg.
Following the meeting, the Blue House put out a press release. According to the
press release, Vestberg said during the meeting that Ericsson would open a
research and development center and test-bed and increase the number of employees
in Korea to approximately 1,000 from the current 80. The press release then went
onto say it was estimated that Ericsson will invest some $1.5 billion in Korea
over a five-year period.
Ericsson also distributed a press release after the meeting. Significantly absent
from the Ericsson statement is any mention of the investment figure cited in the
Blue House press release. It merely noted that "Ericsson, together with leading
Korean companies, will establish a community for the development of sustainable
climate solutions based on 4G technologies and, given mutual success, will
further expand its presence in the market." The press release quoted Lee as
saying, "We expect to see more of Ericsson in the Korean business landscape."
This was followed by a Financial Times report, which quoted Bjorn Allen,
president of Ericsson Korea, as saying it was "premature" to talk about concrete
figures. Ericsson also said it plans to open a "competence center," not an R&D
center.
The Blue House subsequently sent out another press release on July 14, explaining
that the actual figure was not mentioned during the meeting between Lee and
Vestberg. So who said what to whom and when?
This is what happened, according to the Blue House: Vestberg met with Korea
Communications Commission Chairman Choi See-joong on July 11, a day before his
meeting with Lee. One of the officials asked what the approximate money figure
for a 1,000-person R&D center would be, and Vestberg replied that while it was
difficult to say for sure, it could be $1.5 billion or $2 billion depending on
market conditions. The Blue House statement released on July 12 gave the amount -
$1.5 billion - based on what was said during the previous day's meeting between
Vestberg and Choi.
In an attempt at damage control, Ericsson Korea also issued a statement on July
14 saying that the "Korean government and Ericsson have full agreement on this
cooperation and investment plan."
The spin doctors at the Blue House caused a major international embarrassment for
the president's office with their amateurish handling of public relations. This
humiliating episode will have a damaging impact on the Korean government's
credibility, not to mention possibly putting Korea in a position of weakness in
future investment negotiations with Ericsson.
(END)