Hanwha agrees to bonuses for DSME employees

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Hanwha agrees to bonuses for DSME employees

Published: 22 May. 2023, 19:14

Daewoo Shipbuilding & Marine Engineering's Okpo shipyard in Geoje, South Gyeongsang [YONHAP]

Hanwha, which will acquire Daewoo Shipbuilding & Marine Engineering (DSME) on May 23, agreed to reward the employees of the acquired shipbuilder with a merit-based bonus equivalent to 300 percent of their base wage upon achieving their targets.

The tentative agreement was reached during a meeting between Hanwha and DSME's labor union held last Friday, although the specific figures for the targets have not been finalized.

The bonus was decided in response to Daewoo Shipbuilding labor union's demand for compensation for their company's takeover by Hanwha.

The bonus, contingent on the accomplishment of this year's sales targets, will be disbursed early next year.

"We will conclude the agreement by the end of May," stated a spokesperson from DSME on Monday. "Extensive discussions between labor and management are taking place regarding the future prospects of Hanwha Ocean.”

The top management of DSME will be changed, and the name will also be rebranded to Hanwha Ocean, should the shareholders meeting approve the agendas at Tuesday's meeting.

After the meeting, five Hanwha affiliates, including Hanwha Aerospace, will acquire a 49.3 percent stake and assume managerial control of DSME through a 2-trillion-won ($1.5 billion) rights offering, finalizing the acquisition.

Following the report on the bonus agreement, the shipbuilding company's stock experienced a surge.

On Monday, Daewoo Shipbuilding closed trading at 29,000 won, marking an increase of 11.75 percent compared to the previous trading day.

Analysts are optimistic about the prospects of DSME's acquisition by Hanwha companies.

"Despite the slower-than-expected revenue growth, it is viewed as a temporary issue, with expectations of a rebound in the second half of the year," noted Yoo Jae-seon, an analyst at Hana Securities. "The integration into Hanwha Group opens up possibilities for long-term synergies in various sectors, including defense, turbines, and engines."

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]