Daedong Euro Motors is protesting what it calls a unilateral contract termination notice from MAN Truck & Bus Korea (MTBK). The company says it invested about 10 billion won ($7.3 million) to run an official service center and faces heavy losses if the contract ends after only about five years.
Daedong Euro Motors said on the 22nd that it had filed a complaint with the Fair Trade Commission, arguing that MAN Truck & Bus Korea's decision to terminate the service partner contract was unfair.
Daedong Euro Motors has operated the MAN Busan New Port Official Service Center since May 2022. Revenue last year was about 7.2 billion won. According to the company, MAN Truck & Bus Korea notified the Busan New Port center in January this year that the contract would end in late January next year, then began recruiting a new service partner in the same area in May.
Daedong Euro Motors said it has invested or holds assets worth about 9.9 billion won, covering land purchases, facilities and equipment, and dedicated parts. Losing official service center status would restrict its warranty repair authority and supply of genuine parts, making normal operations difficult, the company said.
MAN Truck & Bus Korea, in a written submission to the court, said either party to the contract may terminate it with 12 months' notice without any separate breach of contract. Facility investment costs and operating losses amount to business risk, the company argued.
Daedong Euro Motors filed its complaint with the Fair Trade Commission in June, asking the regulator to determine whether MAN Truck & Bus Korea abused its bargaining position. The head of MAN Truck & Bus Korea is also scheduled to appear as a witness at the National Assembly's comprehensive parliamentary audit on the 23rd.
"We trusted the MAN brand, invested in facilities and equipment, hired employees and worked for customers," said Cheon Hwi-yeon, chief executive of Daedong Euro Motors. "The fact that the contract contains a termination clause does not erase responsibility for a small company's investment losses and its employees' job insecurity."