South Korea announced on Thursday that it would offer about 240 billion won ($224.72 million) in loan guarantees and low-interest loans to regions hit by corporate restructuring, including the area of the local unit of General Motors' soon-to-be-shut factory.
A total of 395 subcontractors, small business owners and workers of Gunsan - the site of GM Korea's factory that the Detroit automaker plans to shut by May - and Tongyeong are eligible for support, the Ministry of Trade, Industry and Energy said in a statement.
Tongyeong, based south of Seoul, is the home of mid-sized shipyard Sungdong Shipbuilding & Marine which is entering court receivership.
“Crises in industries that take up a large portion of the regional economy have raised concern about the increased dangers of unemployment and subcontractors' financial difficulties,” the ministry said.
Out of the 240 billion won, 130 billion won is earmarked for loan guarantees for subcontractors, 50 billion won for low-interest loans for small business owners, and the balance 60 billion won for special loan guarantees.
Since GM announced the plant shutdown in February and said it will decide the future of the remaining three plants in the country within weeks, union officials said this week almost 2,500 workers at GM Korea have applied for a redundancy package that the automaker is offering as part of a drastic restructuring.