Shipbuilder Woes Caused by Drop in Work, Compounded by Labor Standoff | Be Korea-savvy

Shipbuilder Woes Caused by Drop in Work, Compounded by Labor Standoff

(image: Korea Bizwire)

(image: Korea Bizwire)

SEOUL, Sept. 2 (Korea Bizwire)South Korea’s major shipbuilders’ troubles caused by drop off in work are being exacerbated by an ongoing labor-management standoff that may further complicate efforts by shipyards to get back on track, industry watchers said Sunday.

Hyundai Heavy Industries Co. (HHI), Samsung Heavy Industries Co. and Daewoo Shipbuilding and Marine Engineering Co. (DSME) have all taken steps to reduce their workforces and have pushed forward various restructuring measures to respond to the weak demand for new ships over the past several years.

Observers here said the inability to reach agreements is fueling uncertainty at a time when companies need to focus on winning more orders and building ships in a timely manner.

HHI, the world’s largest shipbuilder by sales, has opened an early retirement program for people in its offshore engineering sector who have only been with the company for five years. It notified workers that it was implementing unpaid leave as a means of cutting overall costs.

It also called on all workers to accept a temporary 20 percent reduction in wages that will be reimbursed once business conditions improve.

The company’s union, which began talks in May, has balked at such measures and ordered a three-day partial walkout Monday through Wednesday. Unionists have demanding that the company give paid leave to workers.

Besides its troubles with the Ulsan-based shipyard, HHI said workers at its subsidiary Hyundai Electric have joined the dispute as that company started accepting early retirement.

The shipbuilder’s management has maintained that the actions being taken are critical for the company to stay afloat.

“At the offshore engineering sector, HHI currently has no work to fulfill and we have not received a new order in 45 months,” a corporate source said.

He added that management is bracing for a long-drawn impasse and is trying to get workers to end the strife.


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