[Yonhap Photo]
SEOUL, Feb. 20 (Aju News) -- The southwestern port city of Gunsan will be designated as an industrial crisis zone to contain the fallout from General Motors's decision to close one of its four plants in South Korea, the presidential office said Tuesday.
On an order from President Moon Jae-in, the government will take quick steps to designate Gunsan as a special crisis area which would receive a wide range of state financial support, low-interest loans and other favors for job security and local businesses, presidential spokesman Kim Eui-kyeom told reporters.
GM's decision on February 13 to close its plant in Gunsan by the end of May triggered widespread concerns in the regional community. The Gunsan plant has some 2,000 workers and 12,000 others employed at suppliers and subcontractors.
In South Korea, GM has run four car assembly plants and one transmission factory since it acquired Daewoo Motor in 2002. The Detroit-based company described the shutdown as inevitable for the restructuring of its overall business. GM Korea, the third-largest carmaker in South Korea, has been hit by falling sales as well as rising costs and debt.
The designation of an industrial crisis zone came amid slow progress in negotiations. Labor unions and citizens in Gunsan have opposed the shutdown, but GM stressed its continued presence in South Korea depends on whether it can secure preferential loans and big concessions from the company's union.
"The performance of our operations in South Korea needs to be urgently addressed by GM Korea and its key stakeholders," GM Executive Vice President Barry Engle said in a recent statement.
"As we are at a critical juncture of needing to make product allocation decisions, the ongoing discussions must demonstrate significant progress by the end of February, when GM will make important decisions on next steps," he said.
reporter
Lim Chang-won
cwlim34@ajunews.com
