The Big 3 shipbuilders, Hyundai Heavy Industries Group (HHIG), Daewoo Shipbuilding & Marine Engineering (DSME) and Samsung Heavy Industries (SHI), have been running internal restructuring programs due to the recession in the shipbuilding industry. Approximately 3,300 workers from HHI and SHI left their companies through voluntary retirement programs in May and June.
According to SHI, about 1,300 workers from its Geoje Shipyard applied for voluntary retirement in June. The number of voluntary retirement applications is now close to the target number for this year of 1,500. The voluntary retirement program is aimed at managers, deputy general managers, and general managers among both office (white collar) and yard (blue collar) workers. SHI is recommending retirement mostly to underperformers. The company is planning to reduce its regular workforce by 40% (5,600 workers) by 2018.
About 2,000 workers left HHIG in May through its voluntary retirement program. Those who took advantage of the program include 1,500 white collar and 500 blue collar workers from 5 HHIG affiliates, including Hyundai Heavy Industries, Hyundai Samho Heavy Industries, and Hyundai Mipo Dockyard.
DSME is not running an early retirement program this year due to the cost burden involved in paying retirement compensation, but is planning to lay off 2,300 workers by 2020. The existing retirement program is mostly for workers who will be reaching retirement age soon.
In the meantime, the Ministry of Employment and Labor (MOEL) designated Korea’s shipbuilding sector as a special employment support industry after a review process. MOEL said that the Special Employment Support Program applies to a combined 78-hundred companies, which also includes shipbuilding companies and their subcontractors but not the Big 3 shipbuilders. The program will be carried out until 30 June 2017.