Local election campaigns embarrass Samsung, SK, Hyundai, Posco
Candidates running in the June 1 local elections have put major conglomerates in an awkward position, as they are pledging to have corporate headquarters and factories be established in their constituencies, despite growing doubts about the feasibility of such promises, according to industry officials, Sunday.
In a race for the governorship of Gangwon Province, Kim Jin-tae of the ruling People Power Party (PPP) promised to cooperate with the PPP’s Wonju mayoral candidate Won Kang-su on convincing Samsung Electronics to build a semiconductor factory in the province’s most populous city.
When President Yoon Suk-yeol visited the province on May 4, Kim also asked for government support for Wonju’s efforts to attract the tech giant’s facility.
Kim’s main competitor, Lee Kwang-jae of the main opposition Democratic Party of Korea (DPK), vowed to create a smart medical industry cluster in the region by attracting the medical device firm of Samsung Electronics to Wonju.
Lee also promised he would convince Hyundai Motor to relocate its business departments in charge of electric and self-driving vehicles, robotics and urban air mobility to Wonju and Hoengseong County.
In the North Chungcheong Province governor race, the DPK’s Noh Young-min told reporters last month that SK hynix was stepping closer to making a large investment for increasing the capacity of its Cheongju plant, even though the chipmaker has not announced any such plans.
Noh, who was the chief of staff to former President Moon Jae-in, said that SK hynix would announce its investment plan in mid-May at the latest, but during last month’s conference call on the first-quarter earnings, SK hynix President Noh Jongwon did not confirm any new plans for the Cheongju facility.
In Pohang, North Gyeongsang Province, civic groups urged both ruling and opposition parties to nominate candidates who have never worked for Posco Group which was embroiled in a controversy earlier this year for its decision to set up a new holding company, Posco Holdings, in Seoul.
After Pohang politicians and presidential candidates leveled criticism at the decision, the group promised eventually to relocate its holding firm to Pohang next year. However, some residents of the port city have still expressed concerns about the possibility of the group breaking its promise.
Posco Group is also facing calls from Gwangyang mayoral candidates to relocate the headquarters of Posco Holdings and Posco Chemical to the South Jeolla provincial city, where the group has its steel mill.
In Dangjin, South Chungcheong Province, DPK mayoral candidate Kim Ki-jae said he will convince Hyundai Steel to relocate its headquarters to the city, where the steelmaker has its steel mill.
The conglomerates mentioned by the candidates have remained cautious about making any official comments about the election campaigns, although some of them raised concerns about the feasibility of the pledges — most of which are considered unrealistic.
“It is virtually impossible to attract talented workers if we relocate our headquarters and R&D facilities outside of the capital area,” an industry official said on condition of anonymity.