What is the real reason behind the split-up of Hyundai Heavy Industries?
What is the real reason behind the split-up of Hyundai Heavy Industries?
  • Jung Jun-ho
  • 승인 2019.06.03 13:40
  • 댓글 0
이 기사를 공유합니다

Why is the conflict between labor and management at Hyundai Heavy Industries (HHI) so great over the split-up plan?

Under the plan, Korea's largest shipbuilder will be divided into Korea Shipbuilding & Offshore Engineering, a sub-holding company merging parts of HHI with Daewoo Shipbuilding & Marine Engineering (DSME), which will carry out shipbuilding and offshore businesses, and a reorganized HHI. 

The management says it is aimed at acquiring DSME, but the labor union is concerned about the possible "restructuring" and some say, "Isn't it part of the chaebol succession process?'

In fact, it seems that there are many mountains to go before the HHI's acquisition of DSME.

Under the plan, into Korea Shipbuilding & Offshore Engineering is in charge of investment, research and development, and controls HHI's production sector. And it plans to take over DSME as a subsidiary.

The problem is that in the process, the real assets go to Korea Shipbuilding & Offshore Engineering, and the debt of 7 trillion won is owed to HHI.

Korea Shipbuilding & Offshore Engineering will become a blue-chip company and HHI will have a debt ratio of 115 percent.

The management has promised job security, but the union is concerned about restructuring.

Kim Hyung-kyun, director of policy planning at HHI branch of the Korean Metal Workers` Union (KMWU) said, "The debt has been passed on to a new company (HHI), so there is bound to be instability. We have no choice but to restructure again just because the company is getting harder.."

In addition, a 30 percent stake in HHI is owned by Chung Mong-joon, chairman of the board, and his son Chung Ki-sun, vice president of the company. 

Some point out that Korea Shipbuilding & Offshore Engineering is a complicated structure to increase shareholder dividends or to ask for the responsibility of the owner's family.

The management says it has nothing to do with the succession, saying that the split is just a procedure to take over DSME as promised.


삭제한 댓글은 다시 복구할 수 없습니다.
그래도 삭제하시겠습니까?
댓글 0
계정을 선택하시면 로그인·계정인증을 통해
댓글을 남기실 수 있습니다.

  • #1206, 36-4 Yeouido-dong, Yeongdeungpo-gu, Seoul, Korea(Postal Code 07331)
  • 서울특별시 영등포구 여의도동 36-4 (국제금융로8길 34) / 오륜빌딩 1206호
  • URL: www.koreaittimes.com / m.koreaittimes.com. Editorial Div. 02-578-0434 / 010-2442-9446. Email: info@koreaittimes.com.
  • Publisher: Monica Younsoo Chung. Chief Editorial Writer: Kim Hyoung-joong. CEO: Lee Kap-soo. Editor: Jung Yeon-jin.
  • Juvenile Protection Manager: Yeon Choul-woong. IT Times Canada: Willow St. Vancouver BC, Canada / 070-7008-0005.
  • Copyright(C) Korea IT Times, Allrights reserved.