[Aju News DB]
SEOUL -- South Korea's central bank on Wednesday pledged a quick injection of state funds to prop up a regional economy in and around the southwestern port city of Gunsan which has been hit by a recession.
Bank of Korea Governor Lee Ju-yeol said at a parliamentary hearing that the central bank would immediately inject a bailout of up to 50 billion won (46.7 million US dollars) into Gunsan and nearby areas. If needed, he said more money would be used to support regional economic activities.
Gunsan has suffered a business setback due to the closure of a shipyard run by Hyundai Heavy Industries and economic activities shrank further after General Motors announced its decision on February 13 to close its plant in Gunsan by the end of May as part of its global business restructuring.
GM Korea, the third largest carmaker in South Korea, has four plants. The Gunsan plant has some 2,000 workers with 12,000 others hired by suppliers and subcontractors. Korea Development Bank, a state policy lender, has been in talks with GM over how to avoid a worst-case scenario.
Gunsan has been designated as an industrial crisis zone to receive state financial support. Citizens opposed the shutdown, but GM stressed its continued presence in South Korea depends on whether it can secure preferential loans and big concessions from workers.
The Hyundai Research Institute said in a report that annual production losses stemming from GM's complete pullout from South Korea would stand at 30.9 trillion won while 94,000 people would lose their job.
reporter
Lim Chang-won
cwlim34@ajunews.com
