Thousands of union members at Hyundai Heavy Industries Co. voted in favor of a wage agreement with management, as the company reported a net loss widened to 572.3 billion won in the fourth quarter of 2017, from 351.8 billion won in the red a year earlier, due to declining order backlogs.
South Korea’s largest shipbuilder said that its operating losses came to 342.2 billion won in October through December, compared with an operating profit of 61.2 billion won from a year earlier, while sales fell 32.9% -on year to 3.48 trillion won in Q4, according to Yonhap news agency.
The voting was held at the shipyard in Ulsan, where 56.3% of the 8,724 members who cast ballots voted in favor of the pact signed by workers and the company. This vote meant a consensus between the union and management that they both need to quickly resolve wage deals ahead of future uncertainty. However, more than 1,100 members did not participate in the vote.
Under the deal, each HHI worker will receive a month of extra salary plus 1.5 million won (USD 1,380) in bonus, with their basic pay frozen for 2016-2017, Yonhap explained. For 2017, the company is offering an additional 1.5 million won in cash to encourage workers to ride out the current slowdown in the industry. They will receive 230% of their monthly salary in performance-based pay for the 2016 fiscal year that ended on May 31 and 97% for the 2017 fiscal year.
The shipbuilder said in early January that it is targeting new orders of USD 13.2 billion worth within 2018, up 76% from last year’s USD 7.5 billion.
In the last years, South Korean shipbuilding industry is hit by a decrease in new orders, as a result from global economic downturn and Chinese competition. In 2017, HHI decided to impose rotational leave scheme for its workers, to tackle the problem of idle workforce, while more recently, it revealed plans to sell USD 1.22 billion new stocks to improve financial situation.
