Shin Myung Electric Manufacturing, at the Banwol industrial complex in Ansan, Gyeonggi Province, announced that it would lay off 60 of its 143 factory workers. Shin Myung, which manufactures electric motors, recently increased the production line of its factories in China.

"The monthly salary for 250 local workers in China costs only W20 million, while the salary for the 143 workers at the Banwol factory costs W300 million," said Kim Jae-woo, a director at the firm.

Kim said moving the factories to China is a matter of survival for Shin Myung. Yet the firm's workers, who these days shave their heads and are wear red bandanas, vehemently disagree.

Orion Electric Co., once one of the seven largest Braun tube manufactures, was placed under legal management after a 60-day strike last year and the economic downturn caused by the spread of severe acute respiratory syndrome (SARS).

Dongyang Elevator, which recorded a sales profit of W3.3 billion during the first quarter this year, sold its shares to a German company saying that local conditions are too difficult for manufacturing. The company now is studying ways to go into the leisure and service industry, by building golf courses and hotels.

Hong Dong-gi, chairman of the chief executive officer association of Asan and Banwol industrial complexes, said that these days CEOs are focusing on securing a quick infusion of cash by disposing of factories. He added that about 90 percent of all CEOs say they would rather leave their children with money than with a troublesome factory.

With more managers giving up on the manufacturing industry, more factories are up for sale. Oh Gap-rok, who owns a real estate consulting office at the Banwol industrial complex, said that usually only one or two factories are put out for sale each month, but these days about five to six companies go up for sale every month.

With an increasing number of factories closing down, machine parts are facing a buyer's market as well. According to a purchase and sale website for idle facilities run by the Small Business Corporation, 1,698 machines were up for sale on Wednesday, garnering only 171 bids.

According to a study conducted by the Bank of Korea, 1,348 companies went bankrupt in the second quarter of this year. Among them, 37.8 percent were in the manufacturing industry. Adding to the sense of crisis is the drop in the number of newly registered manufacturing businesses.

According to the Small and Medium Business Administration, of the 2,684 corporations that were registered in May, only 19.8 percent were in the manufacturing industry, the first time in two years that the percentage of manufacturers has fallen to below 20 percent.

A manufacturing company moving out of the country no longer makes the news. Samsung Electronics has over 80 percent of its production facilities abroad. Almost 60 percent of Samsung's refrigerators, air conditioners, and other household electronics are made outside of Korea. The basis of production for high-tech manufactured goods is currently being moved to China, as well. Up to 30 percent of the firm's TFT-LCDs, a cutting-edge product in a field that the firm expects to get big, will be transferred to China starting next year.

LG Electronics said it would start making flat-screen televisions in China. "Labor costs are too high and it is no longer meaningful to build manufacturing factories in Korea," LG Electronics Vice President Kim Ssang-su said.

This trend is no exception for foreign companies. Korea Tokyo Siricon, a semiconductor parts producing company, will be moving its TR business headquarters to China. Korea Donggwang, a Japanese electronics parts company, reduced the number of employees from 2,000 to 250. Korea Casio also cut its employees, from 400 to 100.

Dong Sun, a textile manufacturing company at Banwol, was one of the most promising small companies of the 1990s, recording over $20 million in export revenue. This year, however, the company went bankrupt under a pile of bad managerial decisions. The president of Dong Sun disappeared and about 70 employees found themselves suddenly out of a job.

Ah Jeon Electric Furnace, with its headquarters right next to Dong Sun, is as desolate as its neighbor. Ah Jeon, a steel pipe manufacturer, put its factory for sale after moving its facilities to China in April.

Computer hardware manufacture Environment and Technology (E&Tech) recently closed down its local factory and moved its facilities to China. The company first built a factory in China in 1996, then closed down its plant in Ansan, and finally disposed of the factory in Euisung, North Gyeongsang Province, the next month. "The 6,000 pyeong factory site in China was lent for W20 million for 50 years, and each Chinese worker costs only W80,000 per month," said Chae Soo-bum, E&Tech's IR team manager. Chae added that there are few company owners left who want to build plants in Korea.

Even the conglomerates are racing to dispose of their local factories. Hyundai Motor Company decided that it would no long build factories in Korea, instead constructing factories in China, Europe, and the United States. The companies supplying parts to Hyundai are following the mother company abroad as well.

(Chosun Ilbo's Special News Team)