FSC unveils aggressive restructuring plan to revamp Korea’s core industries

The government is pulling out all the stops
to revive Korea’s sluggish economy. It has unveiled plans to comprehensively restructure
sectors that have lost steam. Top of the priority list are the shipbuilding,
shipping and steel industries. Kim Min-ji has more.
The Financial Services Commission is urging stakeholders to take a stronger approach to
restructuring Korea’s traditional core industries. “Business conditions are deteriorating structurally
in industries such as shipbuilding and shipping and the situation is not likely to clear up
soon. Our task is to either root out low-performance companies or support them to ensure they are
competitive.” The financial regulator is looking at strict
restructuring, especially for shipbuilders and shipping firms.
Daewoo Shipbuilding and Marine Engineering has been advised to reduce wages and jobs
on top of the 700 positions it already cut. Creditors have been asked to get Hyundai Heavy
Industries and Samsung Heavy Industries to also draw up self-rescue plans.
The FSC has also called on the debt-ridden shipping sector to complete renegotiations
with ship owners to reduce their charter rates by next month.
If they fail to do so, creditors may have no choice but to put them under court-receivership. “It remains to be seen whether efforts at
the government level will work… These industries are in a state where restructuring is inevitable.
Companies may initially push back but… if it helps strengthen their competitiveness,
drive down costs and create synergy through mergers, it could produce good results.” “The Financial Services Commission also announced
a plan for limiting the fallout from its restructuring scheme. It vowed to expand the assets of state-run
banks… and come up with measures to support workers who are laid off.” The regulator says it will implement a three-tier
plan that will start with the restructuring of industries most affected by current economic
conditions,… then cover companies or sectors suffering from oversupply and credit risks.
Kim Min-ji, Arirang News.

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