Minister calls on carmakers to make restructuring efforts

SEOUL, Jan. 21 (Yonhap) -- South Korean automakers must make thorough
restructuring efforts if they hope to stay afloat in the face of dwindling
demand, a senior policymaker said Wednesday.

Auto sales in South Korea fell in 2008 for the first time in four years as the
global economic slump weakened demand for new vehicles. The nation's smallest
automaker, Ssangyong Motor Co., currently awaits a court decision on whether it
will receive bankruptcy protection.
"Our auto industry has entered a crisis phase along with its counterparts in
other nations," Knowledge Economy Minister Lee Youn-ho told a meeting with
business officials in central Seoul. "It can tackle the crisis only through
restructuring efforts."
"The government will do its utmost, but the industry must also take steps to
rescue itself and improve labor-management relations significantly," Lee said.
Labor issues have frequently led to work stoppages at the nation's automakers.
The labor union of leading Hyundai Motor Co. said yesterday it is demanding more
working hours and more pay despite cooling demand, and will vote on a strike
motion as early as next month.
With no end in sight to the world's economic unrest, outlooks for the auto
industry remain grim. South Korea's economy, Asia's fourth-largest, is expected
to see low growth figures this year, with some analysts predicting a recession
for the first time in 11 years.
In an attempt to shore up the local economy, the government has accelerated a
restructuring drive aimed at ailing shipbuilders and construction firms.
Creditor banks decided on Tuesday to collapse two firms, a builder and a
shipyard, and placed 14 construction and shipbuilding companies under debt
rescheduling programs.
"The biggest priority in our business policy is to stop competitive companies
from going bankrupt, but we cannot keep all of them alive. Some must suffer the
pains of undergoing surgery," Minister Lee said.
Lee painted a bleak picture for the economy's immediate future, saying it will
take time for the country to recover.
"No one can be sure when the economic crisis will come to an end and even the
most optimistic views say the economy will hit bottom in the middle of this
year," he said. "Still, it is doubtful that the local economy could return to
normal by the end of this year."
kokobj@yna.co.kr
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