Hyundai Heavy Industries’ shareholders on Monday voted to approve the company’s restructuring plans despite strong union opposition.
Shareholders of South Korean shipbuilder Hyundai Heavy Industries (HHI) approved of the company’s restructuring plans on Monday, according to several media reports.
HHI will now be split into four separate entities, which include shipbuilding, electronics, construction equipment and robotics. In December of last year, the shipbuilder already separated its service and green energy divisions into different companies, South Korea’s Yonhap News Agency reported.
Trading of HHI shares will be suspended from March 30 to May 9. The four companies will formally launch in April, and Hyundai Robotics will serve as the holding firm.
According to the Korea Times, HHI CEO Kang Hwan-goo said, “The split will lower the shipbuilder’s debt-to-equity-ratio to below 100 percent. We will do everything we can to help each unit become a leader in its respective field.”
However, unionized workers at HHI have expressed strong opposition to the company’s restructuring, claiming the spinoff will come at the expense of workers’ jobs. In response to HHI’s shareholders approving the plan, Kan Matsuzaki, a director from the IndustriALL Global Union, said, “We are very disappointed by the company’s attitude, which denied the voices of union members who own HHI shares. They must understand that their wealth was built from the hard work of the workers. The company should not have prevented the participation of union members in the shareholders’ meeting.”
As a result of South Korea’s struggling shipbuilding industry, at the end of October, the nation’s government committed to spend around 11 trillion won by 2020 to support the industry, according to multiple media reports.
Overall, South Korea is home to the three largest shipyards in the world, which in addition to HHI, includes Samsung Heavy Industries Co., and Daewoo Shipbuilding & Marine Engineering Co. (DSME). The country’s fourth largest shipbuilder, STX Pan Ocean, filed for court receivership in South Korea in May, and Chapter 15 bankruptcy protection in the United States in October.
HHI shareholders approve restructuring plans
