Published : 2013-08-20 20:23
Updated : 2013-08-20 20:23
Korean firms with overseas plant facilities appear to harbor no plans to bring operations back home mostly because they believe business conditions to be better outside the country, a recent poll showed.
According to the Korea Chamber of Commerce and Industry on Tuesday, out of 700 local companies with overseas factories, almost 80 percent said conditions were better where they were compared to back home in Korea.
Another 91 percent said they had no plans to relocate their operations to other countries.
Only 1.5 percent said they might consider moving back to Korea.
The poll comes amid mounting concerns about the signals of protectionism coming from Korea’s main trade partners such as Tokyo and Washington.
President Barack Obama has recently sparked further concerns with his moves defending Apple Inc. in its legal dispute against Samsung of Korea.
Park Jong-gap, an executive at the chamber, said that “an increasing number of advanced nations are showing signs that they want global firms to relocate to their home countries to help create more space for their home-grown players.”
Local companies acknowledged the situation was getting more difficult abroad, but said high labor costs and stormy labor relations kept them from considering moving back.
Up to 43 percent, according to the poll, cited such factors.
Another 32.7 percent cited financial reasons, mainly involving the costs for withdrawing and relocating the plant operations.
Up to 19 percent said they feared a move would lead to a weaker stronghold in the markets they were in.
At the same time, global firms with operations in Korea, particularly those in the auto sector with powerful labor unions, have recently been indicating they might be pulling out of the country, or at least scaling down their operations.
GM is one such firm, with industry sources saying the company, which has seen more than its share of strikes in Korea, will eventually be relocating to Europe where it would be more appreciated due to the economic stimulus new factories would offer.