South Korean shipbuilder Hyundai Heavy Industries (HHI) has agreed with its workers to implement a paid leave rotation scheme as a way of coping with work shortage.
The five-week program rotation would help resolve the issue of the idle workforce, HHI said, enabling the employees to keep their jobs.
The leave system, starting on September 11, was being proposed to unions last month, and it involves around 7 % of the company’s 8,930 workers.
The union seems to have hammered out a deal that involves workers being paid 70% of their average salary, instead of being sent to unpaid break, as was initially proposed.
Separately, Hyundai Heavy Samho Industries said that 2,680 of its production staff will be taking paid leave for five weeks from October 16 to June 24, 2019.
The move is being pursued as HHI is left with a lower order backlog, which currently stands at 85 ships, against last year’s 110 ships, with only ten ships being constructed at the yard at the moment.
Should the ordering activity continue to dwindle the shipbuilder might be faced to close more of its yards.
To remind, in May this year, HHI decided to temporarily close its Gunsan dockyard starting as of July 1, 2017, due to a lack of shipbuilding orders. During the period, maintenance and repair works are scheduled to take place at the site.
The latest workforce-related measure is said to be driven by HHI’s cost cutting efforts aimed at keeping the shipbuilder financially stable.
HHI reported a 49.7 percent drop in its net income during the second quarter of 2017 totaling in KRW 69.2 billion (USD 61.6 million).