[UPDATES] Hyundai shipyard's operation suspended for unusual safety check

By Park Sae-jin Posted : April 20, 2016, 11:08 Updated : April 20, 2016, 16:27

Hyundai shipyard workers down tools for a safety check. [Yonhap Photo]


The operation of South Korea's troubled Hyundai Heavy Industries came to a complete one-day halt Wednesday in an unprecedented move to conduct sweeping safety checks prompted by a series of industrial accidents that killed five workers this year.

The rare voluntary work stoppage came with a statement issued in the name of all personnel: "We feel miserable and sad because there have been a series of industrial accidents that made our enormous efforts fruitless". Five workers have been killed after being caught in accidents on duty, including three in a week this month.

Hyundai announced just a day-long work stoppage, but it may take more time to restore its full operation as South Korea's labor ministry imposed a ban Wednesday on all 200 forklifts at the shipyard over an unspecified period.   

The tragedy highlighted the continued challenges facing Hyundai Heavy, which has made rigorous restructuring and cost-cutting efforts to improve its financial status.

Like other South Korean shipbuilders, Hyundai has shifted their strategy to focus on deep-sea drilling rigs and production facilities after the global financial crisis damped orders and Chinese shipyards out-priced them.

However, Hyundai suffered a second consecutive year of deficit, posting 1.36 trillion won (1.2 billion US dollars) in losses last year after a drop of 2.21 trillion won a year earlier, due to increased costs from a delay in the construction of offshore facilities and order cancellations.

In the first quarter of this year, the shipyard won $1.74 billion worth of overall orders, down 42.3 percent from a year earlier. Its shipbuilding orders tumbled 63 percent on-year to $234 million.

In January, Hyundai opted to temporarily shut one of its two factories for offshore facilities for three months, saying a slide in oil prices has caused a decline in new orders for facilities such as FPSO (Floating, Production, Storage and Offloading) units and oil rigs.

A recent business survey conducted by the Korea Chamber of Commer and Industry found that up to 50,000 workers from South Korea's three major shipyards would be laid off in three years. The three shipyards have 144,000 workers, including 91,000 hired temporarily or based on contracts. Their combined loss surged to 7.7 trillion won last year, but market watchers say their woes would continue this year.

Aju News Lim Chang-won = cwlim34@ajunews.com 
 
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