Workers demand asset sell-off to pay wage raise

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Workers demand asset sell-off to pay wage raise

Despite the slumping performance of the nation’s shipbuilding industry, unionized workers at Hyundai Heavy Industries, the world’s top shipbuilder, are demanding management raise their salaries by selling off company-owned shares and real estate.

The labor union claims the profit Hyundai Heavy would gain from the hiked prices of the shares and real estate would be sufficient to make their salary increase possible.

The union’s call came after it launched four partial strikes between Aug. 26 and Sept. 25 breaking a two-decade strike-free period. Management offered about 100 percent of the monthly wage as a bonus plus 1 million won ($847) compensation for a wage freeze. However, unions demanded a 127,560 won increase in the base salary plus a 250 percent bonus.

The union cited an audit report last year of Hyundai Heavy, which showed the company has 4.52 trillion won worth of financial assets available for sale. The biggest portion of assets is the stake in Hyundai Oil Bank, valued at around 2.95 trillion won. The report also showed real estate irrelevant to business amounts to 579.7 billion won. Hyundai Heavy is the top shareholder of the refiner, with a 91.13 percent stake, which posted a healthy net profit of 274.9 billion won in the first half.

After posting net losses for seven consecutive quarters, the No. 1 shipbuilder is suffering a liquidity crunch.

The company has been scrambling to ease the problem by selling off its stake in affiliates. It sold a stake of 1.4 percent in Hyundai Motor worth 499.9 billion won to the top automaker’s vice chairman Chung Eui-sun on Aug. 28. On Aug. 23, Hyundai Heavy had its subsidiary Hyundai Samho Heavy Industries sell its 1.5 percent stake in Posco at 226 billion won, nine months after another subsidiary Hyundai Mipo Dockyard liquidated 872,000 shares in Posco. Hyundai Heavy and Posco forged an agreement in 2007 to cross-hold shares in each other.

“The union’s demand is far-fetched when the company is making the best-possible effort to escape from a liquidity crisis,” said a Hyundai spokesman.

The prospect of the shipbuilder’s improved performance for this year is not good. NH Investment & Securities said in a report on Saturday that the company is expected to end up receiving orders worth $4.9 billion this year, only 59 percent of its initial target of $8.35 billion.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]
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