Shipbuilding Industry Braces for Further Restructuring | Be Korea-savvy

Shipbuilding Industry Braces for Further Restructuring

(image: Korea Bizwire)

(image: Korea Bizwire)

SEOUL, Jul 2. (Korea Bizwire)With the South Korean shipbuilding industry reeling from years of hardship, another wave of restructuring is expected to hit in the second half of the year.

As the shipbuilding industry has been facing a long-term recession on a global scale, those who have worked in the industry have either opted to retire early or take time off from work.

Hyundai Heavy Industries Co. decided to let go a third of its director-level managerial employees working in the company’s marine plant sector.

This follows the closure of the company’s factory operations in August of last year due to a lack of projects for 43 consecutive months. This is the first time that the factory that builds marine plants has halted operations since it was built in 1983.

A total of 5,600 workers are currently associated with Hyundai’s marine plant division, which has a mix of both temporary and permanent workers.

However, not everyone is destined for unemployment, as the company still requires workers to manage the customer service division and to support efforts to win new project bids and orders.

Those who had been working in the company’s production sector, however, will definitely be out of work.

A portion of these employees will be transferred to the shipbuilding division, while the remaining workers will be forced to take a leave of absence.

Meanwhile, the company’s labor union has applied for mediation over a salary dispute to the National Labor Relations Committee, a government entity overseen by the Ministry of Employment and Labor.

Other large corporations, namely conglomerates such as Samsung and Daewoo with heavy industry arms are also facing continued woes, although the latter is faring better than the former.

Samsung Heavy Industries Co. promised to lay off 30 percent of its 14,000 workers by 2018. An official at Samsung said that the company “was trying hard to carry out its promise.”

Daewoo Shipbuilding and Marine Engineering’s CEO Jung Sung-leep said in a press conference last month that the company had been commissioned enough projects to last until the third quarter of 2020.

However, since the global economic downturn has affected the industry around the world, the company has decided to reduce its projects. Following such a move, a reduction in manpower would be inevitable, experts say.

H. S. Seo (

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