By Jhoo Dong-chan
Workers’ pay at the nation’s big three shipbuilders nosedived during last year’s restructuring amid the global decline in demand.
At Daewoo Shipbuilding & Marine Engineering (DSME), the average annual salary plunged 15 million won ($13,410) to 60 million won, the largest drop among the three, according to company reports.
DSME also cut executive salaries by 20 to 30 percent during the second half of last year because of liquidity problems. The company’s managing directors’ salaries were cut by 10 to 15 percent.
The ailing shipbuilder also had a massive layoff program to reduce its workforce to around 10,000.
The nation’s largest shipyard, Hyundai Heavy Industries (HHI), reported that the average salary for its workers was 67.18 million won last year, compared with the previous year’s 78.27 million won.
The decline was largely attributed to the company’s decision to scrap fixed overtime working hours because of the decline in orders, an HHI official said.
HHI also had a so-called “voluntary retirement program” last year to cut its workforce. Its average length of service is now around 15 years, in stark contrast to its average of 20 years in the 1990s.
The average pay for workers at Samsung Heavy Industries (SHI) was 68 million won last year, down 3 million won from the previous year. SHI also cut executive salaries by 30 percent, while managing directors suffered a 20 percent reduction.
The company’s annual incentive payment was also scrapped last year due to poor sales performance.
“Shipyard employees were once the envy of all Korean workers for their high salaries, but it isn’t the case anymore,” an industry insider said.
“Such gloomy sentiments in the shipyards are reflected in the local economy. Ulsan, the home of HHI and the richest city in the country, is no longer as economically lively as it used to be. The real estate business there is now the slowest ever.”
Due to an industry slump and subsequent decline in demand, Japanese shipyards are reportedly on the verge of overtaking Korean shipyards in order backlogs and market share, while the latter has suffered multitrillion-won operating losses for the past several years.