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Kia Appoints Lee Vice Chairman After Jeong Resigns Amid Recalls

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Sept. 7 (Bloomberg) -- Kia Motors Corp. said today that Jeong Sung Eun resigned as vice chairman of the South Korean carmaker to take responsibility for the recent recalls of four models. President Lee Hyoung Keun will replace him.

Jeong stepped down Sept. 3 after Kia issued a series of recalls worldwide, Michael Choo, a company spokesman, said by phone. Lee was appointed vice chairman, Kia said in a separate statement today.

The resignation highlights increased sensitivity among automakers to quality problems after Toyota Motor Corp., the world’s largest carmaker, recalled more than 8 million vehicles in the past year for problems related to unintended acceleration. Kia’s action was swift and appropriate, said Chae Hee Guen, a Seoul-based analyst at Meritz Securities Co.

“Jeong resigning is a preemptive action,” Chae said. “Quality is a top priority for Kia and Hyundai Motor Co. management. They don’t want to tarnish their image.”

Jeong, a former president of Kia, was in charge of the production division, Choo said. Jeong wasn’t immediately reachable for comment.

Kia, an affiliate of Hyundai Motor, fell 0.2 percent to close at 33,400 won in Seoul trading, while the benchmark Kospi index dropped 0.3 percent.

South Korea’s second-biggest carmaker is recalling about 85,900 vehicles worldwide because of a wiring problem that can cause fires, Kia said in an e-mailed statement yesterday.

Kia will recall about 36,000 Soul compacts; 33,000 Sorento sport-utility vehicles; 8,000 Mohave SUVs; and 8,900 Cadenza sedans, the company said. The vehicles were made between September 2009 and July this year, the carmaker said.

The company will recall another 18,147 Sorento, Borego and Soul models in China because of problems with circuit boards, the General Administration of Quality Supervision, Inspection and Quarantine said in a statement on its website yesterday.

To contact the reporter on this story: Sookyung Seo in Seoul at sseo10@bloomberg.net

To contact the editor responsible for this story: Seyoon Kim at skim7@bloomberg.net

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