As part of its continuing effort to combat dwindling orders, South Korea’s largest shipbuilder Hyundai Heavy Industries revealed plans to carry out a voluntary retirement program. The shipbuilder said it has offered to provide up to 20 months’ salary to those who apply for the program by April 29.
Hyundai Heavy said it is still unclear how many of its 16,000 employees will opt to leave the company, citing the voluntary nature of the program. Employees who have worked for the company for more than 10 years are eligible for the retirement program, Yonhap news agency reported.
This measure came in addition to a rotational paid leave scheme that the South Korean giant implemented in the fourth quarter of 2017, to tackle idle workforce. HHI asked about 600 employees to leave for five weeks, from 11 September to 22 October, during which they would be paid 70% of their salaries. The company had earlier asked 5,000 workers to voluntarily take unpaid leave, claiming financial shortage.
Revealing plans for 2018, HHI said it was targeting new orders of USD 13.2 billion worth, up 76% from last year’s USD 7.5 billion. The company has not won any offshore plant orders in the last two years.
The country’s shipbuilding industry is hit by an oversupply of vessels combined with decrease in new orders in the last years, as a result from global economic downturn in 2008 and Chinese competition.
Only in 2015, the country’s top three shipyards, Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, suffered a combined operating loss of 8.5 trillion won, according to Yonhap.
