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Auto Plant Suspension Rattles Incheon District, Ulsan

Posted December. 02, 2008 03:38,   


GM Daewoo yesterday morning suspended operations at its No. 2 plant in the Bupyeong district of Incheon.

The atmosphere at the General Motors affiliate was bleak and desolate after production was suspended until Jan. 4. This heralded the halt or reduction of operations by domestic auto companies in the wake of the global financial crisis.

○ Daewoo GM haunted by imminent layoffs

Security guards at the main gate of the plant blocked the entrance to journalists.

GM Daewoo had previously allowed journalists to enter the plant, but not this time after the facility stopped producing Tosca luxury sedans and Windstorm sport-utility vehicles.

An employee said, “We decided on the measure after concluding that pictures of idle plants would not be good for the company’s image.”

At lunch time, only a small number of employees were seen outside of the facility. Most were workers at the company’s No. 1 plant or researchers at the factory complex. The No. 1 plant, which makes the small-size Gentra, will be temporarily closed starting Dec. 22.

With a large-scale job cuts and layoffs looming, most of the company’s staff looked depressed and worried.

An employee at the No.1 plant said, “A temporary halt to production doesn’t matter to most employees, but a number of workers are mainly worried that the suspension could lead to massive restructuring. It is especially true since many of them experienced it firsthand seven years ago.”

In 2001, Daewoo Motor, the predecessor of GM Daewoo, sought bankruptcy protection while undergoing restructuring in the course of being sold to GM, laying off 1,700 employees at the time.

Though worker fears at the No.1 plant is not yet tangible, those at the No. 2 factory expressed a bleak and hopeless reality.

Another employee at the No. 2 factory complained about the company’s unilateral suspension. “Some workers went to Jeju Island to pick tangerines as daily workers while others returned to the countryside with their families,” he said. “Most workers, however, remain idle since they find it difficult to find substitute employment over the month-long suspension.”

GM Daewoo agreed to pay 70 percent of basic pay over the suspension period, but most employees feel financially strapped since they no longer earn extra for overtime work or special duties.

The plant’s suspension has also taken a heavy toll on the neighboring commercial district.

A restaurant owner near the factory said, “Since November, fewer customers have come and the number of customers has been cut nearly in half. We were packed at lunch time but not one customer came today.”

○ Hyundai suspension rattles Ulsan

“I am considering closing my business,” a restaurant owner in Ulsan’s Hyomun industrial complex said yesterday.

The complex houses a number of Hyundai Motor affiliates and is crowded with many restaurants. With word spreading that the auto giant suspended overtime work and special duties at most of its plants, many restaurant owners did not hide their anxiety.

Hyundai said it will keep running its No. 3 plant, which manufactures the bestselling compact Avante (Elantra in other markets) and the i30 hatchback.

One restaurant owner in her 50s said, “Even at the slightest hint of trouble at Hyundai Motors, most of its subcontractors and affiliates suffer a great deal. I’m even seriously considering closing my business.”

Duck Yang Industry, whose 790 staff makes dashboards for Hyundai, began receiving applications for early or voluntary retirement Thursday. More than 30 subcontractors are known to be considering the same thing, fueling worker fears over a ripple effect.

“I am already fearful of imminent restructuring and layoffs. I don’t want to even imagine myself losing my job,” a worker at an affiliate company said.

buddy@donga.com raks@donga.com