GM Plant Closure Turns Gunsan into Ghost Town

      May 31, 2018 12:50

      The closure of GM Korea's plant in Gunsan on Thursday is emptying the southwestern industrial town of its population in a process familiar from GM headquarters' home of Detroit.

      The Gunsan plant employed around 2,000 workers, but only 15 to 20 remain to look after the sprawling 1.2 million sq.m complex.

      Song Yong-sun (55) came to work on Wednesday. "I've worked here for the last 23 years since the plant was built back in 1995," he said. "I thought I'd retire at this factory, but now I'm at a loss."

      It is not the only closure turning the city in North Jeolla Province into a ghost town. Last July, a Hyundai Heavy Industries shipyard shut its doors after failing to win new orders.

      GM and the shipyard at one time accounted for 68.1 percent of the city's total production, manufacturing W6.2 trillion worth of products (US$1=W1,081). But in 2015, their combined output fell to W2.54 trillion or 25.9 percent of the city's production.

      Workers headed to other parts of the country in search of jobs, many leaving their families behind since property is more expensive elsewhere.

      Kim Sung-sam (42) used to work for a Hyundai Heavy subcontractor but now works part-time in nearby Jeonju. He left his wife and three children in Gunsan. "I go home around once or twice a month," he says. 

      A security guard greets a transit bus at the GM plant in Gunsan, North Jeolla Province on Wednesday.

      Hyundai Heavy employed 5,200 staff at one time, and GM and its subcontractors together around 12,000 workers. Including their families some 60,000-70,000 people depended on the two companies for their livelihood.

      Some 1,500 of GM's workers accepted voluntary retirement and 200 of the rest will move to other GM factories. Over the last three years, Gunsan's population has dropped by around 5,000, and many apartments are dark at night.

      Like Detroit, Gunsan was once a model of the manufacturing industry sustaining the economy of a mid-sized city. Its population increased steadily after Hyundai Heavy opened the shipyard in 2008. Jobs became widely available and the regional economy got a boost, attracting people from other parts of the country. 

      Due to the skills required in the shipbuilding industry, most of the workers were in their 30s and 40s, and they had 8,119 children under 10 between them in 2008, surpassing the number of youngsters leaving the city for the first time since 1997.

      But only five years later GM decided to stop selling Chevrolets in Europe because there was no market for the gas-guzzlers, most of which were made in Korea. At around the same time, the shipbuilding industry began to suffer a global slowdown. 

      A shopping district in Gunsan, North Jeolla Province is deserted on Tuesday.

      Gunsan's population peaked at 278,000 in 2015 and has been declining ever since. After the closure of the two facilities, the town will empty even faster. Already in the first four months of this year, the population dropped by another 1,100.

      Young workers are leaving and only the elderly stay behind. Faced with a sharp decline in tax revenues, the city is finding it increasingly difficult to finance welfare programs.

      Ma Kang-rae, an urban planning professor at Chungang University, said, "A key characteristic of an industrial city is a sharp increase in the economically active population, only to see an exodus in that population once businesses close down."

      As the middle-class population decreases, the cultural vitality of the city declines as well. Kim Hang-suk at Kunsan National University said, "With factory workers who constituted the middle class leaving, the cultural facilities they frequented are sitting idle and deteriorating. If a city loses its appeal as a residential location, it becomes a ghost town." 

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