Samsung Heavy Industries Co., a local shipyard, unveiled its detailed self-restructuring program which centres on a cut in workforce and having executives return part of their salaries.
Earlier, the shipyard has said it will conduct a self-rehabilitation scheme worth 1.5 trillion won (US$1.27 billion), including asset sales and a cut in employees. Its creditors provisionally approved the program.
According to the plan, Samsung Heavy will reduce its workforce by 1,500 through an early retirement scheme this year, and further cut its employees down the road. Also, its executives will return some 30 percent of their salaries starting from July.
The shipyard also plans to suspend part of its production facilities, including floating docks, in gradual phases to tide over a fall in new orders.
Samsung Heavy, a shipbuilding unit of the country’s top conglomerate Samsung, also proposed a stock sale, spawning speculation that its affiliates, including Samsung Electronics Co., may join forces to salvage the embattled shipyard.
Samsung Electronics is the largest stakeholder in the shipyard with 17.62 percent, and other affiliates, such as Samsung Life Insurance Co. and Samsung SDI Co., also own stakes.
Some market observers speculate that Samsung Electronics Vice Chairman Lee Jae-yong may participate in the potential stock offering.
Last year, the group’s apparent heir expressed his intention to buy stocks in Samsung Engineering Co., to help the group’s plant-engineering unit improve its worsening financial footing.
Meanwhile, other local rivals are also working to cut their workforce this year to tide over a protracted slump in the global shipbuilding sector, with some 6,000 employees expected to leave their companies, according to industry sources.
Hyundai Heavy Industries Co., a struggling shipbuilder, has already received early retirement applications from some 2,000 employees, and Daewoo Shipbuilding & Marine Engineering Co., another local rival, is to slash its workforce by an additional 2,300 to 10,000 by 2019.
Daewoo Shipbuilding workers on Tuesday approved a strike proposal claiming that the company and its creditors are pressing them to accept unilateral pain sharing under the tough restructuring program.
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