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Most Korean manufacturers rule out reshoring: poll

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LG Electronics' washing machine-manufacturing plant in Tennessee / Courtesy of LG Electronics
LG Electronics' washing machine-manufacturing plant in Tennessee / Courtesy of LG Electronics

More than nine in 10 Korean companies aren't considering bringing their manufacturing back home due mainly to labor regulations here, a poll showed Tuesday.

Of the 306 Korean businesses that have overseas operations, 93.5 percent said they have no plans for reshoring, according to the survey by the Korea Enterprises Federation (KEF).

Nearly 98 percent of corporations with a workforce of 300 or more said they are not considering reshoring, with the comparable figure for firms with fewer than 300 workers coming to 87.5 percent.

Some 30 percent cited Korea's labor regulations as the biggest hurdle for their possible reshoring.

It was followed by the country's tax system with 24.5 percent, environmental restrictions with 16.7 percent and zoning rules with 13.1 percent.

Slightly over 82 percent said they don't know enough about Seoul's reshoring promotion system.

The Yoon Suk-yeol government has promised to expand support for companies that move production back home, including state financial incentives and tax cuts.

The respondents also cited more tax breaks as the most pressing issue for reshoring at 31 percent, followed by bigger government subsidies at 27.8 percent and more financial incentives at 21.6 percent, according to the survey.

The KEF called on the government to introduce a wage system based on performance and push for deregulation in the Seoul capital area in order to help promote reshoring.

Many Korean companies have moved their production facilities overseas in recent years due to high wages and tough labor laws here. (Yonhap)




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