[Yonhap News Photo]
SEOUL -- South Korea's debt-stricken shipyard, STX Offshore & Shipbuilding, will be put under court receivership, its key creditor said Tuesday, blasting union leaders for dragging their feet in presenting a "viable" agreement on layoffs.
After a midnight deadline, union leaders and company officials reached a tentative deal on cutting labor costs through unpaid leave and reductions in wages and bonuses in return for scaling back layoffs.
Korea Development Bank (KDB) rejected the deal as insufficient, saying the shipyard should file for court receivership. The state policy lender accused the union of hampering negotiations by opposing workforce reductions such as outsourcing and voluntary retirement. KDB wanted a 75 percent reduction in labor costs. Out of 690 shipyard workers, some 500 should leave through a voluntary retirement program and outsourcing.
On March 8, creditors decided to keep afloat STX Shipbuilding with a continued injection of liquidity, saying South Korea needs a shipyard capable of building small and mid-sized tankers. However, KDB urged the shipyard to present a sweeping self-rescue plan endorsed by workers.
STX Shipbuilding, which used to be the country's fourth-largest shipbuilder, began falling apart in 2008 when a financial crisis battered the global shipbuilding industry, forcing the shipyard to grab orders at lower prices. The shipyard filed for court receivership in May 2016 and resumed normal operations in August last year. Despite efforts to reduce its debt through the sale of non-core assets, the shipyard has failed to ease its liquidy crisis.
