INCHEON — A government team conducted an on-site inspection to support steelmakers and their workers in Incheon's Jemulpo District, where companies face a combination of plant closures, voluntary retirement programs and output cuts. The move aims to help small and mid-sized subcontractors hit by the fallout and to ease the crisis in the regional industrial ecosystem.
The joint inspection team, made up of officials from the Ministry of Trade and Industry, the Korea Institute for Industrial Economics and Trade and private-sector experts, visited Incheon on the 19th to assess the city's bid to have Jemulpo District designated a pre-emptive industrial crisis response area for the steel sector.
The team visited Hyundai Steel's (004020) Incheon plant to inspect sites including a shuttered small-rolling mill, then moved to Dongkuk Steel's (460860) Incheon plant to review idled production lines and adjustments to capacity utilization.
Steelmakers in Jemulpo District are facing a convergence of problems: a prolonged slump in construction, an influx of low-priced Chinese steel, U.S. tariff barriers and a sharp rise in industrial electricity rates. Along with equipment shutdowns and restructuring at the large steelmakers, orders have dried up for parts and processing subcontractors, pushing concerns over mass job losses and a chain of supplier failures to their highest level yet.
The team then held a joint discussion at the Jemulpo District Office's Songnim building with officials from the Incheon city government, the district office, the Incheon Chamber of Commerce and Industry and the steel industry, focusing on how the downturn is spilling over into the broader local economy, including workers and neighborhood businesses.
Incheon is spending 4 billion won ($2.8 million) in state funds, secured in July when the Ministry of Employment and Labor designated the area a pre-emptive employment crisis response area, on support for workers. Through the industrial crisis designation, the city plans to secure a comprehensive package including emergency management stabilization funds, policy financing, research and development support, and retraining for workers changing jobs.
With the on-site inspection complete, the government will begin consultations with relevant central government agencies based on the team's assessment report. The designation will then be finalized and announced after a final review and vote by the Ministry of Trade and Industry's industrial crisis response deliberation committee. If the district is included in the program, which runs for two years, emergency funding for small and mid-sized partner firms will begin immediately.
"The steel industry in Jemulpo District is a core industry that underpins the manufacturing ecosystem in Incheon and the greater Seoul area," Incheon Mayor Park Chan-dae said. "We will work closely with the central government to make sure the pre-emptive industrial crisis response designation goes through."