President tells auto industry to tighten its belt before assistance

(ATTN: RECASTS 2nd, 7th paras to clarify the auto industry stimulus plan has not
been finalized)
By Byun Duk-kun
SEOUL, March 26 (Yonhap) -- President Lee Myung-bak urged the country's
automakers Thursday to do everything they can to overcome the economic slowdown
before seeking government assistance, saying their workers may be getting more
benefits than those of international competitors.

The call came shortly before Seoul said it was now considering a set of tax
incentives for buyers of new automobiles.
"The reason the automobile industry almost always becomes a big issue whenever
world leaders meet is because the industry creates a large number of jobs," the
president said at an emergency economic committee meeting.
He stressed the need, however, for the companies to first take strenuous efforts
to bail themselves out, according to his spokesman Lee Dong-kwan.
The president noted the average salary of workers at Hyundai Motor, the country's
largest automaker, was higher than that of American employees at the company's
Alabama factory, though productivity lagged behind that of the U.S. plant.
"Labor and management will first have to announce drastic measures" to prop
themselves up, the president was quoted as saying, also urging them to improve
relations to meet the new challenges of the 21st century.
The new tax incentives, if finalized, would include a 70 percent cut on
registration and acquisition taxes for buyers who replace their vehicles
manufactured prior to 2000 with new ones that emit less greenhouse gases, a
measure aimed at boosting domestic purchases.
The presidential office Cheong Wa Dae said, however, that there will be no other
direct assistance for the ailing automobile companies as such a move could
undermine the principles of free trade.
"As the country is spearheading the international move against trade
protectionism, the government thoroughly reviewed the (tax incentive) measures to
make sure they do not run against the regulations of the World Trade
Organization," the presidential spokesman told reporters.
"We need to understand the measures are intended to help reduce carbon emissions
while also helping to create jobs," he said.
bdk@yna.co.kr
(END)