[Yonhap News Photo]
President Park Geun-hye warned Monday that South Korea's shipbuilding industry would collapse like a shipyard in the Scandinavian city of Malmo if it fails to carry out "bold" restructuring, as shipyard workers vote over a proposed strike against any drastic redundancy.
South Korea's economy has "no future" without "bold" corporate restructuring, Park said in a speech at parliament, adding the economy was in "a desperately dangerous situation" due to an industrywide crisis in shipbuilding and other sectors.
Restructuring, especially in the ailing shipbuilding industry, must be carried out in a "proactive" way to prevent it from falling apart like the Kockums shipyard in the Swedish port of Malmo.
"We should bear in our mind that we could see the same fate as Malmo," Park said.
"It's now painful, but if we drag our feet, we will see a more painful situation."
Malmo was once known for its robust shipbuilding industry, with its iconic 128-meter-tall crane regarded as a symbol of its manufacturing industry. The crane, however, was nicknamed the "Tears of Malmo" after it was sold to Hyundai Heavy Industries in 2002 only for one US dollar and residents cried at the sight of it being shipped to South Korea's industrial port of Ulsan.
Ulsan used to boast of South Korea's highest per-capital income for years, but some say it now face the same fate as Malmo. "Now we are shedding the 'Tears of Ulsan'," said Jung Young-do, the head of Ulsan's chamber of commerce.
On Monday, unionized workers at Daewoo Shipbuilding and Marine Engineering, one of South Korea's three top shipbuilders, called a vote for a strike.
The vote came after Daewoo Shipbuilding CEO Jung Sung-leep last week suggested the company should curtail facilities for offshore plants by up to 25 percent to ride out its liquidity crisis.
Jung also supported the idea of separating Daewoo Shipbuilding's defense section for its independent survival. The company has already presented a self-rehabilitation program worth 5.3 trillion won (4.5 billion US dollars) to reduce its cost and debt through asset sales and cuts in jobs and wages.
South Korea's three top shipyards are under creditor-led restructuring to reduce snowballing debts that have weighed heavily on creditor banks and prompted government officials to set up an 11 trillion won restructuring fund.
Aju News Lim Chang-won = cwlim34@ajunews.com
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reporter
Park Sae-jin
swatchsjp@ajunews.com
