Nuclear Phase-out Policy Deals Fatal Blow
Doosan Heavy Industries & Construction has finally decided to put some of its idle workers on partially paid leave for a certain period of time as its revenue was cut in half from its heyday and its loss for the past five years has topped one trillion won.
The company has been suffering severe financial difficulties due to the government's nuclear phase-out policy and a slump in the global power generation market.
The company said on March 11 that CEO Jeong Yeon-in has sent the labor union a request for a labor-management discussion on placing idle workers on partially paid leave for a certain period of time. The management explained that the company had no choice but to take measures to cut fixed costs because it lost 10 trillion won in orders after the Korean government scratched off nuclear and coal-fired power plant projects.
The company's sales fell to less than 50 percent of its 2012 peak, and its operating profit shrank to 17 percent. Over the past five years, the company's net loss amounted to more than one trillion won, making it impossible for it to meet financial expenses with its earnings from sales alone. As if to add oil to the fire, its credit rating has crashed. Hence, the company has been put in a life-and-death crisis.
Doosan Heavy Industries & Construction has steadily implemented self-help measures in the face of continuing financial difficulties. From Feb. 20 to March 4, 2,600 employees aged 45 or older (born 1975) left the company through a voluntary retirement program.
The company plans to place some of idle workers, regardless of their division, on leave for a certain period of time and pay them 70 percent of their average wages during the leave period. The company stressed that it does not plan to halt a certain business or suspend the operations of some of its plants in Changwon.
However, the labor union has rejected the company's proposal. “We cannot accept the management's one-sided approach,” the labor union said. “We sent an official letter to discuss wages and working conditions in a special collective bargaining negotiation or a collective wage negotiation for 2020 with the participation of representatives of the labor and management."