HHI tightens belt further [Courtesy of Hyundai Heavy Industries ]
With no signs of a quick turnaround in its business, Hyundai Heavy Industries (HHI) announced another round of spending cuts on Monday.
Senior executives at HHI and its affiliated firms will be paid up to 50% less and new facility investment will be suspended until the company’s business turn a corner, HHI said in a statement.
Top executives will be obliged to use economy class in air travels and non-core in-house and outdoor events and training programs will be temporarily suspended, it said.
With the global shipbuilding industry in protracted slump, the world’s biggest shipbuilder reported s posted a net loss of 434.1bn won ($383mn) in the third-quarter, much bigger than analysts had expected.
The deficit highlights the continued challenges facing South Korea’s largest shipbuilders, which shifted strategy to focus on deep-sea drilling rigs and production facilities after the global financial crisis damped orders and Chinese shipyards out-priced them.
Last year, the company reduced the number of executives by about 30 percent and cut the number of entire workforce by about 5 percent under a voluntary early retirement scheme.
To offset an extended period of business slump, Hyundai Heavy and its affiliates have been also selling off stakes in other companies to secure more cash.
Hyundai Heavy has recently made headlines for selling 3.16 million shares of Hyundai Motor to the automaker’s vice chairman Chung Eui-sun for nearly 500 billion won.
Hyundai Samho Heavy Industries, HHI’s affiliate, reportedly sold 1.3 million shares in steelmaker POSCO for more than 226 billion won ($189.2 million). With the sell-off, HHI has sold its entire stake in POSCO.
By Alex Lee
reporter
Park Sae-jin
swatchsjp@ajunews.com
