[THE INVESTOR] Hyundai Heavy Industries’ labor union is strongly opposing the company’s move to spin off its facility-assistance business unit, industry sources said on June 21.

Although it is one of Hyundai Heavy’s key promises to its creditors, unionists claim that the move would lead to a rise in nonregular workers -- mostly the 994 employees who are currently working at the division.

The union’s representatives decided to propose a general strike last week, denouncing the shipbuilder’s latest self-rescue plan.

Earlier, Hyundai Heavy mapped out 3.5 trillion won (US$3.02 billion) worth self-rehabilitation measures, including asset sales and a cut in the workforce, in order to stay afloat amid a drop in new orders.



Under the shipbuilder’s self-rescue plans, temporarily approved by the financial authorities and its creditors, led by KEB-Hana Bank, it will reduce its stock holdings, sell noncore assets and reduce its workforce, which will lower its debt-to-equity ratio below 100 percent by 2018.

The shipbuilder swung to the black in the first quarter for the first time in 10 quarters with an operating income of 325 billion won, aided by its stronger restructuring efforts.

Other local shipbuilders are also seeking to turnaround, with unionized workers opposing their moves.

The union at Daewoo Shipbuilding & Marine Engineering voted for a strike last week after the company proposed self-rescue measures worth 5.3 trillion won in total that include an employee wage cut and asset sales. Samsung Heavy Industries also has crafted self-rehabilitation measures, worth 1.5 trillion won, for their creditors. The scheme calls for the sale of noncore assets, such as buildings and stocks, and laying off employees.

The country’s top three shipyards suffered a combined operating loss of 8.5 trillion won last year due largely to increased costs stemming from a delay in the construction of offshore facilities and an industry-wide slump.

(theinvestor@heraldcorp.com)