CORONAVIRUS AFFECTS MANUFACTURERS

[Anchor Lead]

The spread of the novel coronavirus is dealing a blow to Korean manufacturers that have factories or suppliers in China. The prolonged shutdown of Chinese plants is derailing the production of automobiles in Korea. Small and medium-sized firms are also voicing out their difficulties. We have the details.

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SsangYong Motor has decided to suspend production at its factory in Pyeongtaek from February 4th to 12th. It is due to the disrupted supply of wiring harness, an assembly of electrical cables used in vehicles. The automaker's stockpiles of the component are running low, as its Chinese suppliers have been suspending operations amid the coronavirus outbreak. A notice from the head of Hyundai Motor's Ulsan plant reads. This is an emergency in which a factory shutdown is inevitable due to the disrupted supply of Chinese components. The notice goes on to say that it remains uncertain when the shutdown will end. Hyundai's decision was also affected by the decreasing stockpiles of wiring harness. The firm will partially adjust their pace of production, while its sister company Kia began reducing production at some factories on Monday. Other Korean companies, such as Samsung Electronics, LG Electronics and SK Innovation are extending the shutdown of their factories in China to this weekend in accordance with local Chinese governments' decisions. The damage is not big for now, but the Korean firms are concerned over the possibility of a longer suspension. Smaller-sized companies, which lack the capability to secure inventories, are also faced with difficulties, such as dropping sales and the postponed release of new products.

[Soundbite] LEE JAE-WAN(BABY GOODS MANUFACTURER) : "Our products should have been exported from February. But the supply of components was suddenly disrupted by the new coronavirus outbreak."

The government held an emergency meeting and decided to actively support the businesses.

[Soundbite] SUNG YUN-MO(TRADE MINISTER) : "The government will provide a trade fund of 400 billion won to help ease financial difficulties faced by businesses. We are also coming up with other supportive measures, including a temporary discount in export insurance premiums and speedy payment of insurance benefits."

It will inject an emergency fund of 20 billion won for SMEs and small business owners.