SEOUL, Feb. 20 (Xinhua) -- South Korea's government on Tuesday unveiled measures to tackle GM Korea's decision to shut down one of its five domestic factories in Gunsan, a port city some 270 km southwest of the capital Seoul.
Kim Eui-kyeom, spokesman for President Moon Jae-in, told a press briefing that the labor ministry decided to take emergency measures to designate the Gunsan region as an employment crisis area under the order of the president.
The designation will enable Gunsan to receive comprehensive government support for job security. Kim said relevant regulations will be revised, if necessary, for the designation as the region does not meet all the requirements.
Meanwhile, the industry ministry will designate Gunsan as a special industrial crisis zone, which entitles the region to a wide range of financial support such as low-rate loan and capital injection, the presidential spokesman said.
The measures came after the South Korean unit of U.S. carmaker General Motors announced a plan to close down its assembly factory in Gunsan by the end of May.
It may reportedly endanger the job security of up to 12,000 laborers, including some 2,000 employees hired by GM Korea and others working for the suppliers of the automaker that has four assembly factories and one transmission plant in South Korea.
According to local media reports, the GM Korea management was denounced by its employees for causing losses to the company by changing low-rate loans into high-rate ones, offered by the parent company in the United States.
The loans requiring higher lending rate benefitted the parent company, incurring hundreds of millions of U.S. dollars in losses to GM Korea in recent years.
The GM Korea management was also accused of providing cars to the parent company at a price even lower than the production cost. It led GM Korea to amass losses in recent years, according to local media reports.
