Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.
Hyundai Heavy pledges to stop manpower cuts
By Lee Hyo-sik
HHI CEO Kwon Oh-gap
By Lee Hyo-sik
Hyundai Heavy Industries (HHI) will stop dismissing employees through voluntary retirement plans and pay each of their workers a special bonus of 1 million won ($910), the company CEO said Monday.
In a statement addressed to employees, HHI CEO Kwon Oh-gap, who took over in September, said that Korea’s largest shipbuilder will no longer introduce voluntary retirement programs.
He said that now is the time for all employees to join together to overcome the current difficulties.
“The campaign to overhaul our corporate structure is close to the end. Our efforts to reduce costs have paid off,” Kwon said. “I believe that all employees now understand where our company stands and are willing to work together. To gather our strength, the company has decided to end the ‘artificial’ manpower restructuring.”
In January, about 1,500 senior manager-level workers left Hyundai Heavy, and two months later about 150 female employees, who were on a payroll for more than 15 years, quit through a voluntary retirement plan.
The CEO said that he will allow the heads of each business division to make decisions on production, sales, personnel management and other business-related activities. “I expect the heads of operations to have a final say on daily business activities. Our overseas units will be responsible for themselves.”
The shipbuilders’ subsidiaries abroad will draw up their own business plans and have to survive on what they earn, Kwon said, stressing that the company headquarters here will refrain from meddling in their management.
The CEO said the shipbuilder will set up an ad-hoc committee consisting of employees from various fields to set common goals for the entire organization and listen better to employee opinions.
“To celebrate the company’s landmark delivery of its 2,000th ship in May, it decided to pay each worker a 1 million won special bonus,” Kwon said. “I would like to ask all HHI family members to help the company make money this year.”
In 2014, the shipbuilder posted a 3.25 trillion won operating loss, the largest ever in its history, due to fierce competition for contracts amid a sluggish global market. To secure orders, it had to build ships and offshore plants at lower prices, which chipped away at its profitability.
Chinese shipbuilders in particular have caught up with HHI and other Korean manufacturers, making it harder for local players to win orders abroad. Falling oil prices have also slashed demand for oil tankers and other types of ships.