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Ruling party urges gov't to expand public projects to save shipbuilders

All News 11:13 June 09, 2016

SEOUL, June 9 (Yonhap) -- South Korea's ruling Saenuri Party said Thursday the government should roll out more state military projects to help normalize financially troubled shipbuilders, which emerged as a potential threat to local industries and the job market.

"Although restructuring in the private sector is inevitable, there also must be government efforts to provide (troubled firms) with work," Saenuri said during the meeting with government policymakers.

The party highlighted that the government should consider placing orders for more warships, which could create work for shipbuilders and give them a chance to recover.

The country's top three shipyards suffered a combined operating loss of 8.5 trillion won (US$7.37 billion) last year, due largely to increased costs stemming from a delay in the construction of offshore facilities and a worldwide dearth in demand.

With restructuring of such firms imminent, industry watchers said the cost cutting and streamlining measures will force many workers at shipyards to lose their jobs. This could be a serious blow for Asia's fourth-largest economy because shipbuilding is one of the country's core industries.

The Saenuri Party said it considered the potential unemployment as the biggest issue for the restructuring of shipbuilders, adding that the government should move promptly to minimize the fallout.

colin@yna.co.kr
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