Restructuring Shipbuilding
Hyundai Heavy Industries is working on a voluntary retirement of 1,500 non-rank-and-file office employees. This is the second time since 2012 that Hyundai Heavy Industries carried out a voluntary retirement. Three years ago, the number was less than 100, which implies that the company is feeling such a sense of crisis nowadays.
At the same time, it is going to kick off business unit reorganization by merging its marine business and plant business divisions with each other. At present, Hyundai Heavy Industries is divided into seven business units engaged in shipbuilding, marine business, plant construction, electric and electronic system business, construction equipment, engines and machinery, and green energy. As of the end of September last year, 3,631 and 1,423 employees were working for the marine and plant business units respectively. The company’s plan is to consolidate the plant division, which has recorded losses for years, with the marine business division for higher profitability.
The plant business unit recorded 1.0519 trillion won (US$970.84 billion) in operating losses during the first three quarters of 2014, with only the shipbuilding division posting more losses (1.9129 trillion won, or US$1.7677 billion) in the entire group. Still, not a few doubt the effect of the merger, because the marine business unit also recorded losses of 412.6 billion won (US$381.3 million) in that period.
Hyundai Heavy Industries President Kwon Oh-gap let 81 out of 262 executive members go four days after he took office. Also, he has reduced the number of business subunits from 58 to 45.