TEHRAN, February 22 - South Korean President Moon Jae-in is in a bind.
TEHRAN,Young Journalists Club (YJC) - South Korean President Moon Jae-in is in a bind.
Either he risks losing political capital and thousands of high-paying jobs if General Motors cuts its presence in South Korea, or he faces a public backlash if he uses taxpayer money as a lifeline for the U.S. automaker.
Last week, GM announced it would shut down a factory in Gunsan, southwest of Seoul, and said it was mulling the fate of its three remaining plants in South Korea. It wants help from the government to restructure and keep the plants operating.
Although coffers are full in both the government and Korea Development Bank, which owns a 17 percent stake in GM Korea, officials say likely opposition from South Koreans makes any financial support for the Detroit auto maker politically tricky.
“We cannot be free from the potential public backlash expected from helping a private company using taxpayers’ money,” said one government official, who asked not to be named because of the sensitivity of the ongoing discussions.
On top of that, public support for South Korea’s auto worker unions, which have a reputation for militancy, has fallen as young workers battle to find increasingly rare full-time positions.
A survey released on Thursday showed 30 percent of respondents oppose any public aid for the automaker, with 56 percent backing support only if GM lays out a feasible turnaround plan. According to the survey by pollster Realmeter, just 6 percent say the government should inject public funds unconditionally to save jobs.
Moon came to office last year on a platform of job creation, and swiftly proposed a 11 trillion won ($10 billion) supplementary budget to add hundreds of thousands of public sector positions.
Amid ongoing corruption scandals rocking some of South Korea’s largest companies, however, Moon also promised to reform an overly intimate relationship between government and large corporations.
Past government interventions in the private sector have not always been successful either.
South Korea’s shipbuilding sector is still floundering despite an injection of more than 7.1 trillion won into Daewoo Shipbuilding & Marine Engineering Co since 2015 - the biggest bailout of a single company in over a decade.
UNIONS AND UNEMPLOYMENT
Moon’s office said this week it would make Gunsan, where GM is closing its plant, an “employment crisis zone” to provide financial support for affected workers.
GM has launched a voluntary redundancy program for all of its roughly 16,000 workers in South Korea.
Source: Reuters
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