STX Offshore goes on general strike over restructuring program
About 700 unionized workers at STX Offshore & Shipbuilding Co. went on a general strike Monday 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.
KDB Chairman and Chief Executive Lee Dong-gull said earlier this month that even if STX O&S and its union agree on a new self-rescue plan, creditors are not planning to inject any fresh funds into the company.
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-to-equity ratio improved to 76 percent from a state of capital erosion in May 2016.
However, shipbuilders, including STX O&S, have been struggling with declining orders amid a global economic slowdown after they were hit hard by the 2008 financial crisis.
South Korea has some of the world’s leading shipbuilders, such as Hyundai Heavy Industries, Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. In recent years, their smaller rivals from China have been rapidly catching up in certain areas, including commercial ships, bulk carriers and container vessels.