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(LEAD) Hyundai Heavy workers stage partial strike for job security

2018/07/13 16:43

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(ATTN: CHANGES number of workers and tense in 2nd para)

SEOUL, July 13 (Yonhap) -- Hundreds of unionized workers at Hyundai Heavy Industries Co. staged a partial strike on Friday, company and union officials said, the latest trouble faced by the world's biggest shipbuilder amid dwindling orders.

Some 200 workers walked off the job at a shipyard in the industrial city of Ulsan, about 410 kilometers southeast of Seoul, and held a protest rally in front of the company's office in Seoul.

"The strike is focused on job security," union spokesman Kim Hyung-gyun said by phone from Ulsan.

A key issue is how to address the large number of idle workers when Hyundai Heavy suspends work at its offshore facilities shipyard in August.

Hyundai Heavy President and CEO Kang Hwan-goo has said the company has decided to halt the operation as orders have dried up.

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

Kang has appealed to employees to cut high fixed costs to win offshore orders, saying there is no way to compete with foreign yards whose labor costs are roughly a third of Hyundai Heavy's.

The union accused management of carrying out unilateral restructuring and pushing to outsource jobs.

Workers also said they plan to hold general strikes from July 19 to 24 and suggested that it could extend strikes in case there is no progress.

Still, the company said the latest walkout will not impact its two shipyards in Ulsan, stating that the number of workers who have put down their tools is just a fraction of the 12,000-strong union.

A company representative said the company's management and labor union should work together to weather the crisis facing the shipbuilding industry.

"Is this really the right time for the union to stage a strike?" another company source, not wishing to be identified, said, arguing that such a move is highly inappropriate at this juncture.

Last year, unionized workers at Hyundai Heavy staged partial strikes.

Hyundai Heavy and other South Korean shipbuilders were hit hard by the 2008 financial crisis due to oversupply and lower demand from shipping lines.

On Thursday, Hyundai Heavy said it achieved 28 percent of its annual order target of $10.17 billion in the first half of the year due to sharp declines in offshore facility projects.

In the January-June period, the world's biggest shipbuilder by sales received $2.87 billion worth of orders as offshore facility contracts plunged 99 percent on-year to a mere $200 million, Hyundai Heavy said in a statement.

As of the end of June, the three shipbuilders had an order backlog valued at $32.19 billion, which will keep their shipyards busy for about a year.

This file photo shows fog covering part of a huge Goliath crane at Hyundai Heavy Industries Co.'s shipyard in Ulsan. (Yonhap) This file photo shows fog covering part of a huge Goliath crane at Hyundai Heavy Industries Co.'s shipyard in Ulsan. (Yonhap)