Due to insufficient workload, South Korean shipbuilder Hyundai Heavy Industries (HHI) has been faced with over 5,000 of idle workers. As a result, the company has asked its union to convince the workers to take an unpaid leave starting September, the Korea Times reports citing a statement from the company. The unpaid leave option is voluntary, however, should it be turned down, the workers would be subject to training, as the union rejected a 20 percent pay cut.
Specifically, the company’s backlog stands at 85 ships, considerably lower when compared to last year’s 110 ships.
As indicated by a company official, there are currently only ten ships being constructed at the yard, rendering 5,000 workers idle, the Korean newspaper reported.
It is believed that the work shortage is likely to persist until June next year. Should the ordering activity continue to dwindle, the shipbuilder might be faced to close more of its yards.
The latest workforce-related measure is said to be driven by HHI’s cost cutting efforts aimed at keeping the shipbuilder financially stable.
HHI reported a 49.7 percent drop in its net income during the second quarter of 2017 totaling in KRW 69.2 billion (USD 61.6 million).
The net income fell from KRW 137.5 billion (USD 122.5 million) seen in the same three-month period in 2016.
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