LG Chem is reportedly most keen on the idea of creating a new electric vehicle battery plant in Gumi City in North Gyeongsang Province under state sponsorship to create jobs, according to source in the local governments.

According to North Gyeongsang Province and Gumi city government on Tuesday, they proposed an investment promotion-type job creation project to Samsung SDI Co., LG Chem, and SK Innovation Co. Sources said that LG Chem showed strongest interest.

The move comes after the Ministry of Economy and Finance announced recently that the government wants to apply Gwangju-type job creation models across the country by designating new location in the first half of this year.

Gwangju-type job creation model involves Gwangju Metropolitan City and Hyundai Motor Co. building a new automobile assembly line in the region to help create jobs and bring life to the economy. Employees will receive about half of the normal wage while the central and regional governments will provide other welfare incentives such as housing and healthcare for workers.

The government has been keen on promoting the Gwangju-type job creation model in other cities. President Moon Jae-in attended the investment agreement ceremony for the Gwangju-type job creation project last month and said “the government will provide active support to regions that accept Gwangju-type job creation model after mutually agreed by workers, management, private sector, and government.

Jung Tae-ho, senior secretary for job creation, also said this month that officials from the business circle are actively looking into regions like Gunsan or Gumi to establish Gwangju-type job creation model. He noted investment will be in future vehicle-related batteries.

Sources noted that Gumi-type job creation model will be an investment promotion-type, different from the model of Gwangju where manufacturing line will be run at fixed wage to lower the production cost for the carmaker. The Gumi case, the central and regional governments will back employee welfare benefits instead of subsidizing wages.

By Woo Sung-deok and Lee Eun-joo

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