Factories that ran on Korean cooperation go silent

[April 10, 2013]  PAJU, South Korea (AP) -- A few hundred South Korean managers, some wandering among quiet assembly lines, were all that remained Tuesday at the massive industrial park run by the rival Koreas after North Korea pulled its more than 50,000 workers from the complex. Other managers stuffed their cars full of finished goods before heading south across the Demilitarized Zone that divides the nations.

Amid a stream of increasingly threatening words and actions, North Korea announced on Monday that it was suspending operations and recalling all of its workers from the Kaesong industrial complex, a factory park just inside North Korea's heavily armed border that pairs cheap local labor with South Korean know-how and pumped out about half a billion dollars' worth of goods last year.

It was the first time that production has been suspended at the complex, which for nearly a decade has been a tenuous but persistent symbol of cooperation in a relationship that now seems at rock bottom.

On Tuesday, the roads leading to Kaesong, the North's third biggest city, were empty of the normal line of cargo trucks and vehicles carrying supplies and people. Inside the complex, a couple of North Korean soldiers, clad in olive green uniforms and riding Chinese motorcycles, patrolled streets that on a normal weekday would have been choked with buses and workers.

A South Korean manager, one of about 400 who remained at Kaesong, said he had been sitting in an unheated office most of the day with four colleagues. Normally, they would be busy checking orders and examining the clothes they produce. But with no work and no television or radio, the manager said they did nothing but "think about the South."

"I feel hungry and cold here," he said as a soft drizzle fell on Kaesong.

Gas and oil is typically sent from the South to keep the heat flowing and the factories churning, but North Korea has closed the border to all workers and goods bound for Kaesong.

"We can't work in Kaesong anymore," he said, declining to be identified because of company rules. "I don't have any good memories left."

The five will share two cars and drive across the border Wednesday.

The pull-out is part of a torrent of provocations and threats North Korea has unleashed at Seoul and Washington in recent weeks. The North is angry at U.N. sanctions punishing it for its third nuclear test on Feb. 12, as well as joint military exercises between the U.S. and South Korea that the allies call routine but that Pyongyang sees as preparation for an invasion.

In what's seen as the latest attempt to stoke fear, North Korea on Tuesday urged all foreign companies and tourists in South Korea to evacuate because it says the rival Koreas are on the verge of nuclear war. Analysts see a direct attack on Seoul as extremely unlikely, and U.S. and South Korean defense officials have said they've seen nothing to indicate that Pyongyang is preparing for a major military action.

Pyongyang announced Monday that it was recalling all North Korean workers from Kaesong and would decide later whether to shut it down for good. Shutting it permanently would sacrifice jobs in a poverty-stricken nation that according to the U.S. State Department has a per capita GDP of just $1,800 per year.

Even the suspension is costing North Korea money, and not just in the short term. The pull-out has left South Korean companies unable to fill orders, raised fears of bankruptcies and is likely to make others think twice about investing in North Korea.

"I deeply regret having entered Kaesong," Yoo Byung-ki, president of BK Electronics Co., said from Seoul. He said both North and South Korea hurt companies in the jointly run complex whenever the countries' relationship went sour.

"All orders got canceled. My clients must be worried. Even if they give us new orders, they will not give us all the orders they used to give," said Yoo, whose company supplies electronic components to consumer electronics companies.

South Korean President Park Geun-hye expressed disappointment at the suspension of operations at Kaesong, and echoed the warning that it would only scare foreign investors away from North Korea.

"North Korea should stop doing wrong behavior and make a right choice for the future of the Korean nation," Park said at the start of a regular Cabinet Council meeting, according to a South Korean media pool report posted on her office's website.

For South Korea, Kaesong's significance goes beyond money. It is the last symbol of inter-Korean cooperation. Other projects from previous eras of cooperation such as reunions of families separated by war and tours to a scenic North Korean mountain stopped in recent years.

When it started almost a decade ago, the zone was hailed as paving a way for the reunification of the two Koreas. South Korea viewed Kaesong as a deterrent to war, a buffer zone when tensions ran high and a channel where North Koreans could get a glimpse into South Korean culture through their interactions with South Koreans, albeit limited.

But even before Monday's announcement, Pyongyang had been allowing operations at the Kaesong complex to wither. Last month it cut the communications with South Korea that had helped regulate border crossings at Kaesong, and last week it barred South Korean workers and cargo from entering North Korea.

Operations had continued and South Koreans already at Kaesong were allowed to stay, but dwindling personnel and supplies had forced about a dozen companies to stop operating at Kaesong before North Koreans were told to stop working there.

North Korea briefly restricted the heavily fortified border crossing at Kaesong in 2009, but factories continued operations.

South Korea's Unification Ministry, which is responsible for relations with the North, said 75 South Koreans at the complex were set to come home Tuesday, leaving about 400. The North has not said that they have to leave.

The more than 120 South Korean companies operating at Kaesong urged North Korea to quickly normalize operations.

"If this situation continues, companies will face the risk of going bankrupt," said Yoo Chang-geun, a vice president of the Corporate Association of Gaesong Industrial Complex.

After an emergency meeting Tuesday in Seoul, representatives of the companies said in a joint statement that they hope to send a delegation of small- and medium-sized companies to North Korea in hopes of reopening the complex. The statement also appealed to South Korea to take a "mature, embracing posture" and work out all available measures to help normalize Kaesong's operations.

A South Korean manager at Daemyung Blue Jeans Inc. at Kaesong said he plans to stay at the complex to protect company assets. Speaking on condition of anonymity because he wasn't authorized to speak to the media, he said there was hope among workers from both sides that current tension would only be temporary.

"Some of the North Koreans left the factory this morning with a smiling face and told me that 'We can meet each other again,'" he said.

[Associated Press; By YOUKYUNG LEE and KIM YONG-HO]

Lee reported from Seoul, South Korea. AP writers Hyung-jin Kim in Seoul and Eric Talmadge in Tokyo contributed to this report.

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