The labor union of South Korea’s STX Offshore & Shipbuilding Co. that has barely avoided court protection earlier this month has decided to stage a partial strike later this week in protest against the self-rescue plan proposed by the company and creditors.

“We strongly refuse (to accept the company’s) self-rescue plan that does not guarantee survival of workers,” the union said in a statement on Monday, threatening to go on partial strikes. “The official self-rescue plan is completely unacceptable as it includes a cut in manpower through voluntary retirement and outsourcing,” the statement read.

STX Offshore & Shipbuilding management has been preparing the self-rescue plan after the government and creditor group earlier this month decided to keep the financially-troubled mid-size shipbuilder afloat via intensive voluntary efforts unlike its peer Sungdong Shipbuilding & Marine Engineering Co., which did not earn the same chance and is set to file for court receivership soon due to massive losses.

Unhappy with the company’s restructuring plan, unionized workers of STX Offshore & Shipbuilding plan to go on a two-day token strike on Thursday and Friday and stage a full strike from March 26 if the company does not respond to its demands. The management, however, is firm that the action is inevitable for survival and that no other option can be considered.

An unnamed official from STX Offshore & Shipbuilding said the company will first receive voluntary retirement and outsourcing applications from production workers. It is even considering asking some employees to submit resignations. The official added that the company is in a deadlock and should mobilize every means possible to stay afloat.

STX Offshore & Shipbuilding creditors including state-run Korea Development Bank (KDB) and Export-Import Bank of Korea recently announced an outline for the financially-troubled shipbuilder that includes an intensive self-rescue plan and winning high value-added gas vessel orders. Accordingly, STX Offshore & Shipbuilding has decided to cut labor costs amounting to 75 percent of production workforce. For remaining workers, the company plans to suspend provision of tuition expenses and incentives to long-serving employees along with other additional wage cutting efforts.

The KDB has expressed that the labor union must agree on the self-rescue plan proposed by the company to stay afloat or else the shipbuilder will inevitably face court receivership like Sungdong Shipbuilding.

By Woo Je-yoon and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]