April 20, 2024

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[THE INVESTOR] The head of Hyundai Heavy Industries called on employees to make sacrifices and concessions to keep afloat the troubled offshore facilities business on Sept. 7.

The world’s biggest shipbuilder by sales suspended work at its offshore facilities in August as orders have dried up.

The company has begun voluntary retirement programs and is pushing to introduce unpaid leave for idle employees of its offshore division.

HHI has 15,795 employees, and among them, some 2,400 belong to the offshore division.

“It may be impossible to maintain the offshore business unless employees make sacrifices and concessions,” HHI President and CEO Kang Hwan-goo said in a written statement, in an apparent reference to voluntary retirement programs and unpaid leave.

The union has called on the management to introduce paid vacations for employees.

Kang said labor costs of the offshore division come to roughly 192 billion won (US$171 million) a year and the costs could go up to about 600 billion won if the company fails to win any new offshore orders in the next three years.

HHI has lost out to Chinese and Singaporean rivals in offshore projects in recent years due to higher costs.

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