April 27, 2024

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[THE INVESTOR] About 700 unionized workers at STX Offshore & Shipbuilding went on a general strike on March 26 over the company’s planned restructuring program.

The union said the walkout at Jinhae shipyard will continue indefinitely until the company withdraws the restructuring program that called for, among other things, a 75 percent reduction in labor costs.

Jinhae is located in the southeastern industrial city of Changwon.

Earlier this month, the state-run Korea Development Bank, the main creditor bank of STX O&S, gave a one-month ultimatum to the company and its union to agree on the sale of non-core assets and steep fixed cost cuts.

The deadline has been set for April 9.

The government and the KDB have warned that STX O&S will be placed under court receivership unless the company and its union agree on a package of drastic self-help measures by the deadline.

STX O&S -- once the world’s fourth-biggest shipbuilder by orders -- was put under court receivership in 2016 but “graduated” in September 2017 when its debt-equity ratio improved to 76 percent from a state of capital erosion in May 2016.

By Song Seung-hyun and newswires (ssh@heraldcorp.com)