HHI asks 5,000 workers to take unpaid leave
South Korean shipbuilder admits it does not have enough orders to keep its workforcebusy.
by Nick Roumpis
Workers at Hyundai Heavy Industries (HHI) have been asked to take unpaid leave as the shipyard does not have enough vessels on its orderbook.
The world’s largest shipbuilder said today it has entered into discussions with union leaders to help persuade 30% of its 17,000-strong workforce to take time off without getting paid, the Korea Times report.
HHI cannot force employees to take leave so each individual has to agree to it,beginning in September.
The company booked a profit of KRW 69.2bn ($62m) in the three months to the end of June, down from KRW 137.5bn a year earlier.
Analysts have predicted that better times await South Korean shipbuilders as order activity has shown signs of recovery.
HHI struck a reported $600m deal with Vitol for the construction of up to eight very large gas carriers (VLGCs).
It was also tipped to win a mammoth order for ultra-large containerships from CMACGM, but it appears that its Chinese rivals have won this race.
An HHI official told the Korea Times: “We have about 30 ships to work on in the second half of 2017.
“So about 5,000 workers have become idle.”
Normally, HHI works on more than 40 projects over the six-month period.
According to latest figures, HHI’s backlog consists of 85 ships, down from 110 a year ago.
And despite winning significant orders, such as the one from Vitol, it seems that it is not enough to keep all workers busy.
According to the same report, HHI may have to place more workers on temporary leave in 2018 if the industry downturn continues.