Moon hails ‘winwin’ job creation deal in Gumi joined by LG Chem

SEOUL, President Moon Jaein on Thursday welcomed a decision by LG Chem to build a major factory in Gumi, North Gyeongsang Province, in partnership with local governments, saying it reflects South Koreans' cando spirit in the face of Japan's export curbs.

He described it as a "Gumitype" job creation model revolving around a fourway agreement involving labor and management at the company, as well as the city and provincial authorities.

The deal was reached just half a year after the start of negotiations, Moon noted.

"Amid Japan's continued export restrictions, confidence that 'we can do' has been confirmed again," he said, attending a signing ceremony in Gumi, 260 kilometers southeast of Seoul.

The Gumi agreement has presented a "new breakthrough" in efforts to invigorate the local economy at a time of internal and external difficulties facing Asia's fourthlargest economy, he added.

Similar to a jobcreation deal signed in Gwangju in January, involving Hyundai Motor, it paves the way for LG Chem to construct a new facility with a lower wage burden and less concern over strikes. Local authorities will provide support for the welfare of workers, and there will be some financial incentives from the government.

The Moon administration has campaigned for the spread of such a program in a bid to boost domestic corporate investment, create jobs and revitalize regional economies.

LG Chem, South Korea's top secondary battery maker, plans to invest around 500 billion won (US$423 million) in the construction of the factory in the Gumi industrial complex to produce core materials for rechargeable batteries.

Secondary batteries are used in various mobile applications such as electric cars and smartphones. Construction is scheduled to begin next year and end in 2024. Roughly 1,000 jobs are expected to be created.

Moon pointed out that the Gumi project is about investing in a new industry crucial in the manufacturing sector in the era of the Fourth Industrial Revolution.

The secondary battery market is projected to grow at an average annual rate of 16 percent or higher by 2025, with that of related materials and parts expected to swell nearly 30 percent, he said.

"The government will also make utmost efforts for the success of Gumitype job (creation)," Moon added.

He appealed to the National Assembly to pass a special bill on balanced national development in order to accelerate the expansion of this kind of winwin jobcreation program.

Source: Yonhap news Agency

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