Gwangju Gwangsan District Applies for Employment Crisis Area Designation After Direct Hit from Kumho Tire and Winia

Suspension of Plant Operations and Corporate Bankruptcies
Measures Taken to Address Employment Instability

Gwangsan District in Gwangju has applied to the government for designation as an Employment Crisis Area in response to the worsening local economic crisis caused by the bankruptcy of Daewoo Winia and the fire at the Kumho Tire Gwangju plant.

According to Gwangsan District on June 23, it has been determined that around 2,500 workers at the Kumho Tire Gwangju plant and about 200 partner companies have been directly affected by the fire. There are concerns that if the suspension of plant operations is prolonged, employment instability will spread and the overall local economy will be negatively impacted.

The effective suspension of business functions at three Daewoo Winia affiliates, including the company that produces the Kimchi refrigerator "Dimchae," due to delisting or bankruptcy, has also been identified as a factor contributing to employment instability. In addition, the partial relocation of production from the Samsung Electronics Gwangju plant overseas and the tariff policies of the second Trump administration in the United States were also considered as factors exacerbating the contraction of local industry.

The government will decide whether to designate the area as an Employment Crisis Area after conducting an on-site inspection and a review by the Employment Policy Deliberation Committee. If designated, various forms of support will be provided, including increased employment maintenance subsidies, deferred payment of employment and industrial accident insurance premiums, and expanded loans for livelihood stabilization.

District Mayor Park Byungkyu stated, "A proactive, government-wide response is needed before the damage from this complex crisis becomes even greater," and added, "Doublestar, the major shareholder of Kumho Tire, must also take responsible action to provide relief for those affected and to normalize plant operations."