Moon scrambles over GM plan

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Moon scrambles over GM plan

President Moon Jae-in urged government departments including the Finance Ministry and Industry and Energy Ministry to come up with measures to help the economy of Gunsan, North Jeolla, when GM Korea closes a factory there.

“Following a closure of a shipyard in Gunsan last year, the shutdown of GM Korea’s assembly line there is expected to have a critical impact on regional economy,” Moon said in a meeting with Blue House aides on Monday. “It will be hard for the Gunsan city government and the North Jeolla provincial government to handle the situation including [potential] layoffs of workers at [the plant’s] suppliers.

“We need to actively review all regulatory measures including measures helping those losing their jobs,” he added.

Korea’s political circles, both the ruling party and opposition, are speaking out on the U.S. company’s threat to close the factory ? and possibly withdraw from Korea entirely.

Three parties that have footholds in the region ? the Democratic Party, Bareun Mirae Party and Party for Democracy and Peace ? are especially sensitive to the issue as it could be a campaign issue in local elections in June.

Korea’s ruling Democratic Party, which set up a task force team after the announcement of the Gunsan plant’s shutdown last week, said it “cannot accept” General Motors’ decision, which puts more than 12,000 jobs at stake.

“The Democratic Party cannot accept the decision,” said Woo Won-shik, a floor leader of the party on Monday at the meeting held with GM Korea’s auto parts suppliers.

“There is a lot of speculation surrounding General Motors’ management of its Korean operation, which doesn’t seem normal, such as its high interest loan GM Korea took out and R&D fees collected from GM Korea. ... Nonetheless, General Motors is demanding unreasonable requests such as tax favors and support in issuing new stock,” he added.

Hong Young-pyo, the task force’s chief, said the GM crisis is crucial for the nation’s automotive industry and employment, and the party will pay great attention to the issue.

The Party for Democracy and Peace opposed the U.S. auto giant’s decision and lashed out at the Korean government.

“While the Moon Jae-in administration’s utmost goal was to increase employment, it turned out that such goal will not be achieved,” said Jo Bae-sook, the party’s floor leader, at a special meeting held Monday to address GM Korea and the Gunsan plant. “It is regretful that Gunsan has to take a bullet again, after its economy was deeply hurt last year when several shipbuilding companies had to shut down there as well.”

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