
Empty shipyard and suicides as 'Hyundai Town' grapples with grim future - rectang
https://www.reuters.com/article/us-southkorea-hyundaitown/empty-shipyard-and-suicides-as-hyundai-town-grapples-with-grim-future-idUSKBN1KX0UT
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doombolt
I think the grim reality is that mono-industry towns are not viable in the
long run. The world seems to have a large supply of these and their future is
never certain.

~~~
ebbv
So what's the solution? If a big company opens a factory in an area, then the
hire a bunch of people at that factory, people obviously want to move closer
to where work is. It's not like those people can then say "Hey we need another
company to open a factory here just in case." Even if there are other jobs
created in the town, the loss of hundreds (or thousands) of jobs is always
going to be devastating anywhere outside of a big city.

It's easy to say "Oh well those people shouldn't have bet everything on that
factory." but that's not realistic or providing any kind of solution.

~~~
freddie_mercury
> So what's the solution? [...] the loss of hundreds (or thousands) of jobs is
> always going to be devastating anywhere outside of a big city.

It seems like the seeds of the solution are contained in your own post: don't
live anywhere but a big city. Or, if you do, realise that you are making a
risky bet with your entire family at stake.

~~~
carlmr
Or don't buy a house where there isn't a diverse portfolio of companies
around.

Because moving from one rental to another is not that hard.

~~~
jackvalentine
A lot of mom and pop investors made incredibly poor decisions in Australia's
mining boom, buying up properties in mining towns to rent for $800k+ and after
the bottom fell out of the market only being able to sell at sub $200k. Often
using equity in existing loans after appreciation to pick up three, four
properties.

It seems insane to me to buy even one property in a mining town, let alone
multiple.

~~~
carlmr
That is capitalism doing its optimization work. It will punish the people that
give credit in these risky cases and the people that make risky decisions like
these because of greed.

If you buy property in more diversified regions you won't make as much money,
but you have less risk and short term crises will usually pan out.

~~~
jackvalentine
The people that gave credit in these risky situations are making record
profits and their dubious banking practices have made them the subject of a
royal commission.

Sure they’ve been theoretically ‘punished’ for lending too much by making a
little bit less profit but it sure doesn’t seem like much of a corrective
action to me.

~~~
carlmr
That's because the government is corrupt. If the government actually let the
banks fail and bailed out the citizens instead the bad banks would be gone,
the citizens would have put the money into the economy again, and you'd have
an economic miracle happening quickly, as it is common after such resets.

Government subsidized failure is one of the main reasons why communism never
worked out. Bad companies need to fail and make way for more efficient or less
stupid companies. Otherwise you end up with all your companies operating at
roughly the same efficiency as the government (close to 0), because there's no
incentive for them to avoid risk. They're rewarded either way.

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phobosdeimos
Those shipyards used to be in my country until South Korea and other Asian
countries took over in the 70s. Succesful countries adapt and survive.I hope
the Korean government isn't stupid enough to try to save them. That simply
won't work.

~~~
clankfan
The Korean government is democratically elected as recently noted in the news.
Aren't you saying "I hope the Korean _people_ aren't stupid enough to try and
save _themselves_?"

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bane
I've been to that region of South Korea a few times. The DSME (Daewoo)
shipyard is in nearby Geoje-do. It's not far from the Samsung Heavy Industries
shipyard. Geoje is home to some incredibly rugged and beautiful coastlines, a
small city and other than the two shipyards, not much else except some fishing
villages. Together, those three shipyards (including the Hyundai one in Ulsan)
used to, and maybe still do, account for the three largest shipyards on the
planet.

Gyeongju, another nearby city is mostly known for historical tourism and home
to some incredible living UNESCO sites. But not much else since it was the
capital of a now defunct nation in the 900s. Busan is the second largest city
in South Korea and one of the few cities that made it through the Korean War
without being flattened into rubble and who's principal industry is port
logistics and fishing -- it's basically Singapore or Hong Kong of South Korea
without all the financial business.

Ulsan is very much a company town on who's fate rests Hyundai's successes --
and Hyundai hasn't been killing it recently. The city is also home to the
world's largest auto factory and number of other Hyundai conglomerate sites.
As Hyundai's fate twists and turns in the global winds, so does the entire
city. It doesn't have much to do with the other nearby cities, and it's on the
northern edge of an isolated region that's politically aligned with the ruling
party, while the rest of the region it and Busan exist within voted for the
other guy.

The relationship with China has been rockier than I think anybody has let on
to and historic relations with Japan have never been exactly "warm". The
recent THAAD anti-missile situation really rattled the Korean-Chinese
relationship and between turning the Chinese public away from obviously South
Korean goods in bulk numbers, China has also seriously ramped up ship
manufacturing and I believe now leads in total tonnage.

In addition, new shipyards are coming online in India and Vietnam putting
additional downwards economic pressure on these three shipyards that used to
enjoy a near monopoly. Even worse, global shipping hasn't recovered, and
movement of energy products (oil and gas) is geographically shifting (less oil
needing to move from Saudi to the U.S. for example) so demand for ships is
down, AND several large shipping companies went out of business putting more
ships up on the secondary market AND it turns out very very very large ships
didn't work out as well as was hoped, so orders for that equipment never
materialized.

As for the other major business there, Korea's auto manufacturing business has
also been consolidating and changing. Hyundai is _the_ major manufacturer, but
Hyundai-Kia has moved much of their manufacturing overseas from Korea into the
domestic markets they sell into and the rest of the auto industry in Korea is
in disarray and succumbing to foreign manufacturers finally clearing various
import hurdles and selling in larger and larger numbers. Among the "basically
defunct": Daewoo Motors (now GM), Samsung Motors (now majority owned by
Renault), SsangYong Motors (now owned by Mahindra). Some of these are still
large, but dying giants.

It looks pretty bad to be honest and my guess is that Ulsan may soon turn into
South Korea's Detroit.

Here's a pretty good article that outlines some of these problems in terms of
raw tonnage [https://wolfstreet.com/2018/07/07/big-three-korean-
shipbuild...](https://wolfstreet.com/2018/07/07/big-three-korean-shipbuilders-
in-a-world-of-overcapacity-and-collapsed-orders/)

~~~
jpatokal
South Korea needs to go upmarket and specialize. Shipyards in Finland and
France, the very opposite of low-cost manufacturing destinations, survive
because they build things like the world's largest cruise ships now:

[https://en.wikipedia.org/wiki/MS_Symphony_of_the_Seas](https://en.wikipedia.org/wiki/MS_Symphony_of_the_Seas)

[https://en.wikipedia.org/wiki/MS_Oasis_of_the_Seas](https://en.wikipedia.org/wiki/MS_Oasis_of_the_Seas)

Also, while Busan has a thriving port, having been to all three you'd have to
down a few shots of _soju_ and squint pretty hard until it starts looking like
Singapore or Hong Kong...

~~~
bane
One other option, and one that _does_ occur from time to time, is contract
defense manufacturing. When I was at the DSME yards, a contract diesel
submarine was being built for a large European country. However, there's
obvious difficulties for that route as a general one.

> Also, while Busan has a thriving port, having been to all three you'd have
> to down a few shots of soju and squint pretty hard until it starts looking
> like Singapore or Hong Kong...

Well, I definitely wouldn't compare the look and feel of the cities. But their
raison d'être is similar.

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Animats
This could work out. The US Navy needs to expand but the US lacks sufficient
shipbuilding capacity.

~~~
gaius
_The US Navy needs to expand but the US lacks sufficient shipbuilding
capacity_

The UK did this
[https://www.bbc.co.uk/news/business-17127488](https://www.bbc.co.uk/news/business-17127488)

~~~
Animats
They got delivery, too. The last of the four Korean-built tankers entered
British waters yesterday.

~~~
gaius
I’ll wager they work in warm waters too, unlike the Type 45s...

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belorn
The article doesn't state it, so what does the gender distribution look like
for the suicide rates? An age group of 25 to 29 and strongly connected with
job loss gives a rather strong hint that the numbers are not evenly spread. If
the total number has doubled then I suspect the increase for that gender and
age group has increased far more than double.

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forkLding
Its much harder to compete now, even originally Chinese-based jobs are being
outsourced too.

~~~
sn41
I have heard the phrase that "Africa is China's China". I don't know how much
quantitatively, offshoring has happened from China.

~~~
forkLding
I would say Africa isn't the biggest. Vietnam (mentioned in article) and
Bangladesh already produce a lot and are overtaking certain industries like
textiles and shoes. For example, Nike's biggest amount of contract factories
are Vietnamese and they earn roughly one to two dollars per day per Vietnamese
worker.

For now, Western companies are still choosing countries in Asia. Maybe Chinese
companies are choosing African countries because minimum wage has increased in
China and many factories have gone bankrupt and other Asian countries only
cater to Western countries for their factory needs.

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petermcneeley
He might not have a job now and at 52 maybe never again, but he needs to look
at the positive side; likely due to labor offshoring a new Hyndai vehicle
might end up being 30% cheaper.

~~~
aetherson
And also other, poorer 52 year old men _will_ have jobs.

Which doesn't mean it doesn't suck for him.

~~~
petermcneeley
Exactly! This reporter should have explained the details of comparative
advantage to these recently unemployed individuals to help them see how much
better they are off economically.

~~~
aetherson
While it's obvious why this guy would prioritize his own job over someone
else's, it's pretty unclear to me why you would expect the reader to care.

Why should I care if a South Korean person has a particular job versus a
Chinese person or whatever? I don't know any of them. Even if I did prefer
jobs to go to my own culture or country or ethnic group or whatever (I largely
don't), these are all third parties to me and probably the vast majority of
people reading this article.

I can understand people who are opposed to globalization to the extent that it
causes job loses in their own country -- even though I don't agree with them.
But the logic of anti-globalization goes out the window when it's comparing
two different third-party countries.

~~~
rectang
> it's pretty unclear to me why you would expect the reader to care.

Because even if the universe is indifferent and the problems of globalization
are vexing we can see even people of other cultures as fellow humans and feel
empathy for them?

~~~
aetherson
Sure. Globalization produces losers. Real ones. This guy's life is worse than
it was, likely persistently so. We can recognize that, and say it sucks.

But someone else's life is better, likely persistently so. That job didn't
vanish, it relocated.

That doesn't erase the suffering. But it does suggest that the kind of snotty
performative anti-globalism that started this thread is, at best,
shortsighted.

~~~
NeedMoreTea
Sure, right now it doesn't affect you. It's not snotty or short sighted
though.

Eventually we can recognise the pattern, and see it's the raison d'être of
globalisation. Separate commerce from state, community and people. One day
you'll have seen this happen so many times, to so many people, that you decide
the cost is probably too high. Perhaps by then you've done so OK that you
still don't care.

The next town over that never recovered from losing it's steel mill, mine or
shipyard, and the fifty and sixty year olds that can't have a comfortable
retirement or pay the last 25% of the mortgage. Sure, they may retrain - if
the courses are available. No chance of even 25% of their former highly
skilled wage, maybe end up in an unskilled role in a store or call centre. No
way to make another degree pay at that stage of life. A life of no opportunity
and possibly anti-depressants. The damage to everyone who lives in the same
town even if they worked elsewhere.

It's a constant. One day it'll be your industry or skill that relocated or
ceased to be. Or of those you care for. Just for another dollar for the
shareholder. But hey, someone's life is better.

With all that GDP real-terms growth we should be able to find a variation on
the theme that ruins fewer lives.

~~~
aetherson
Yep, it (probably) will be my industry or skill at one point, and I'll
probably be pissed about it then.

But it'll still be the case that if someone does my job for cheaper than I do,
it'll be because they're poorer than I am, and if I had a neutral perspective
on my own situation (which of course I won't), I'd have a hard time making the
case that I deserved to be paid more while that guy struggled in poverty.

And incidentally also whatever product or service I'm producing now costs less
to the people who consume it, making them de facto wealthier.

