Workers at shipyards of Hyundai Heavy Industries, located in Ulsan, South Gyeongsang Province, raised concerns over a possible massive layoff on Friday, insisting that CEOs and executives have to be responsible for their poor management before considering a workforce reduction or downsizing.  

“We want to believe that the recent news report that the company is set to announce a 10 percent workforce reduction plan next week is not true,” Kim Byung-jo, a spokesperson of the shipbuilder’s labor union, told The Korea Herald, quoting the CEO’s remark made in a meeting on Thursday with the union representative. 

 

“The company chief Kwon Oh-gap said the report on the incoming downsizing plan was written without conformation from any corporate official,” Kim said, adding that the meeting was designed for the management to brief on the current business situation to the union. 


Industry watchers said 10 percent of the firm’s full-time employees will amount to around 3,000 personnel, which will have a spillover effect on subcontractors.

The nation's top shipbuilder, hit by a drought of new shipbuilding orders, already laid off about 1,300 staff in January last year. 

Despite the continued talks with the company’s decision makers, the labor union remains in doubt over the actions that the company chief will take to make the company turnaround by the year-end as he had promised in his New Year’s message. 

“Cost reduction including a massive layoff could be the only option to see a turnaround in the financial statement amid falling shipbuilding orders,” Kim said.

According to the company’s data, new orders won by the shipbuilding and offshore plant businesses with its two shipbuilding sister firms -- Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries -- are estimated to drop 70.3 percent in the first quarter of this year from the same period last year.

The consensus by political parties on the restructuring of industries that face overcapacity or liquidity issues is raising fears among union members about losing their jobs.

The shipbuilding industry has been targeted for an intensive overhaul, along with the shipping sector, due to the continued business slump over the past few years.

As a solution to the overcapacity issue in the industry, former Strategy and Finance Minister Yoon Jeung-hyun recommended last month that the government push for a merger between Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering.


By Seo Ji-yeon (jyseo@heraldcorp.com)