Shares in Hanjin Heavy Industries & Construction tumbled on Monday after the Korean shipbuilder said it decided to shut down three operations in Korea due to labor strife.
Hanjin said in a statement that it had submitted reports to local governments that it would close one shipyard and two plants, saying ongoing strike activity since 2009 had hampered its production.
Hanjin, the only unprofitable shipyard listed on Korea’s main exchange, tumbled as much as 11 percent in Seoul trading, the most since September 2009.
Union members are opposing plans to cut about 400 jobs at Korean yards after the company made a net loss of 51.7 billion won ($46 million) last year.
“The shutdown could hurt Hanjin Heavy’s image, which could make it harder for them to win orders,” said Lee Jae-won, an analyst at Tong Yang Investment Inc. in Seoul.
Hanjin Heavy got 50 percent of 2009 sales from building and repairing ships, according to Bloomberg data. The stock has climbed 82 percent in the past year, compared with a 26 percent gain for the benchmark KOSPI index.
Union members have been in dispute with management since June 2009, staging frequent stoppages that have forced the shipyard to use outside labor to avoid delivery delays, according to Hanjin Heavy’s statement.
The company is offering an early-retirement package to help cut its workforce. At the end of January, 190 workers had applied for the program, which had a deadline of Monday.
The shipbuilder, which also has a yard in the Philippines, had 3,526 employees at the end of September.
(From news reports)