With declining orders and halved profits this year, shipbuilders and steelmakers, the two new pillars of the country’s exports, are trimming down both their work forces and production as a last resort to overcome their ongoing slumps.
Hyundai Heavy Industries, the world’s No 1 shipbuilder, decided to cut the number of high paid executives by 10% in its latest personnel reshuffle.
Ahead of the reshuffle, the company asked its employees to retire for the first time in its 40 year history. Around 100 manager level employees over 50 applied for voluntary retirement.
HHI has traditionally been a solid performer and didn’t carry out any restructuring during the 1998 Asian financial crisis. In July, its labor and management agreed to raise the retirement age from 58 to 60. Since most employees have been at the company for 20 years, the restructuring announcement came as a shock to the market.
A PR employee at the company said that “We have about 26,000 workers in total, and an estimated 1,000 workers who reach the retirement age leave the company every year.”
“The reason for carrying out the voluntary retirement is not that the company’s order backlogs are running out, but that it wants to prevent its work force from getting old, and hire fresh and young workers with the aim of creating jobs.”
However, industry insiders interpret the shipbuilder’s unprecedented restructuring move as a sign of increasing awareness of difficulties within the company.