Korea's Labor Unions Asked to Cooperate In Daewoo Revamp
Creditors of embattled Daewoo Shipbuilding & Marine Engineering Co. have demanded that the shipbuilder's labor union accept the company's large-scale restructuring scheme in return for helping the shipyard stay afloat, says Yonhap.
The creditors, led by the state-run Korea Development Bank, have asked Daewoo Shipbuilding's labor union to accept the company's restructuring plan, which includes job cuts, in exchange for the funding.
It is set to announce a debt-for-equity swap worth 3.2 trillion won (US$2.83 billion) for Daewoo Shipbuilding this week, in order to help it avert delisting from the local stock market.
The KDB-led creditors have said that the shipyard's labor union should not launch any strikes and must accept a wage freeze and a workforce reduction plan.
If the labor union does not accept their demands, the lenders said they would not provide any financial help to the stuttering shipyard, the sources said.
Daewoo Shipbuilding plans to cut 5,500 jobs by 2018, of which more than half will be by the end of this year, to reduce expenses as new orders dry up.
South Korea's shipbuilding industry may eliminate about 40,000 jobs in the second half of this year, after some 20,000 were cut in the first six months, the Korea Labor Institute estimated.
