STX Shipbuilding Modified Self-Rescuing Reorganization Scheme Approved By Creditors

- Apr 18, 2018-

STX Shipbuilding will cut costs by cutting payrolls and taking unpaid leave on vacation in order to avoid bankruptcy. The self-rescue reorganization plan submitted by STX ShipbuildingWN flanges was approved by the union and has been approved by the creditor Korea Industrial Bank (KDB).


Korea Industrial Bank requires STX Shipbuilding to cut 40% of fixed costs and 75% of labor costs. According to the previous creditor’s plan, STX Shipbuilding needed to reduce the number of production workers from about 700 to 180, which is equivalent to dismissing about 75% of production workers. This plan was strongly opposed by the union workers.WN flanges


According to the revised self-rescue restructuring plan, STX Shipbuilding will reduce layoffs by cutting payroll and taking unpaid leave on wheels, thereby reducing the same amount of costs. In the next five years, the basic salary of STX shipbuilding workers will be reduced by 5% and the bonus will be reduced by half. At the same time, STX shipbuilders will also take 6 months of unpaid leave each year WN flangesfor the next 5 years.


Korean media believes that the effectiveness of this plan remains to be seen. According to this plan, workers must spend 40% of their current wages within the next five years. It is not easy to support a family by relying on wages below the minimum wage. If technical workers, who are difficult to substitute, thus withdraw from and choose another industry, this will not help the shipyard’s overall competitiveness.WN flanges