Government Supports ‘Shipyard Restart’ in Gunsan... Industrial Crisis Area Extended for 1 Year

One-Year Extension of Gunsan Special Industrial Crisis Response Zone
Hyundai Heavy Industries Gunsan Shipyard to Resume Operations in January Next Year
Electric Vehicle Cluster to Begin Full-Scale Production in the Second Half of Next Year

President Moon Jae-in delivering a greeting
(Gunsan=Yonhap News) Reporter Ahn Jung-won = President Moon Jae-in is delivering a greeting at the Gunsan Shipyard Restart Agreement Ceremony held at Hyundai Heavy Industries Gunsan Shipyard in Gunsan, Jeonbuk on February 24, 2022.
jeong@yna.co.kr
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[Asia Economy Sejong=Reporter Lee Jun-hyung] As the Hyundai Heavy Industries shipyard located in Gunsan, Jeonbuk, is about to resume operations, the government has decided to extend the designation period of Gunsan as a Special Industrial Crisis Response Area by one year. The electric vehicle cluster being established in Gunsan by the government will also begin full-scale mass production starting next year.

The Ministry of Trade, Industry and Energy announced on the 31st that it will extend the designation period of Gunsan, whose designation as a Special Industrial Crisis Response Area was set to expire in March this year, by one year. Earlier, Jeollabuk-do applied to the government on the 4th of this month to extend the designation of Gunsan as a Special Industrial Crisis Response Area. Accordingly, the Ministry of Trade, Industry and Energy held an Industrial Crisis Response Review Committee from the 22nd to the 28th to review the extension of Gunsan’s designation.

With this measure, Gunsan will be designated as a Special Industrial Crisis Response Area from the 5th of next month until April 4th of next year. Also, Gunsan, which has been designated as a Special Industrial Crisis Response Area for the past four years, will have completed the maximum designation period of five years under current law.

Gunsan was first designated as a Special Industrial Crisis Response Area in April 2018. This was a follow-up measure after Hyundai Heavy Industries Gunsan Shipyard ceased operations in July 2017 and Korea GM decided to close its Gunsan plant in February of the following year. At that time, the Gunsan regional economy suffered damage as the Hyundai Heavy Industries shipyard stopped operating and the Korea GM Gunsan plant also closed, leading to the bankruptcy of partner companies and the collapse of commercial districts. Considering the recovery trend of the regional economy, the government extended the designation period of Gunsan as a Special Industrial Crisis Response Area by two years in April 2020, which was originally set to expire in March of the same year.

Han Young-seok, CEO of Hyundai Heavy Industries, Declares the Restart of Gunsan Shipyard
(Gunsan=Yonhap News) Reporter Ahn Jung-won = Han Young-seok, CEO of Hyundai Heavy Industries, declared the restart of the Gunsan Shipyard at the Gunsan Shipyard of Hyundai Heavy Industries in Gunsan, Jeonbuk, during the Gunsan Shipyard Restart Agreement Ceremony held on the 24th of last month. 2022.2.24
jeong@yna.co.kr
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The government’s decision to extend the designation period by one year is based on the judgment that the regional economy could return to a recovery trend around next year. First, the Hyundai Heavy Industries shipyard, a core of the Gunsan regional economy, will resume operations in January next year. The Ministry of Trade, Industry and Energy expects that along with the resumption of the Gunsan shipyard, local partner companies will also follow a normalization process.

The Gunsan electric vehicle cluster will also begin full-scale mass production starting next year. Since 2019, the government has been promoting the establishment of an electric vehicle cluster on the site of the Korea GM Gunsan plant through the Gunsan-type job project. The total investment is 517.1 billion KRW, with five companies participating, including Myungshin, Edison Motors, and Daechang Motors. Among them, Myungshin will start mass production of electric vehicles from the Chinese electric vehicle company Faraday Future at the Gunsan electric vehicle cluster from the second half of next year. Myungshin plans to gradually increase production volume and eventually produce 80,000 electric vehicles solely at the Gunsan electric vehicle cluster.

The government plans to prepare additional support measures in consultation with Gunsan City and Jeollabuk-do. A Ministry of Trade, Industry and Energy official said, “Currently, shipbuilding equipment suppliers and automobile parts companies in Gunsan are struggling to maintain production and employment due to a lack of orders,” adding, “Full-scale production and employment expansion are expected to begin next year.” He continued, “In addition to the support measures provided so far, we will secure additional support methods and resources to maximize support for the recovery of the Gunsan regional economy.”