Gov't remains lax while large companies begin emergency management

It was reported that the labor union of Daewoo Shipbuilding & Marine Engineering, which has been opposing Hanwha Group’s acquisition of Daewoo Shipbuilding & Marine Engineering, included a tenure guarantee of the current management as a condition for the acquisition. In the labor union’s document shared at a delegate meeting with regards to the announcement of the acquisition, which was obtained by a member of the People Power party, employment guarantee of employees along with tenure guarantee of the management and ban on the government’s interference with the appointment of senior members are included as parts of four significant demands. According to the document, the replacement of the current management, including CEO Park Du-seon, whom the previous administration appointed in March, will be considered the current administration’s interference.

Typically, the management should take responsibility and step down in case of poor management to the point of corporate sell-off. Daewoo Shipbuilding & Marine Engineering has wasted trillions of won of taxes in the form of public fund support and capital expansion. The company recorded over 2.3 trillion won of operating loss in the last one and a half years, with its debt ratio soaring from 274 percent in June last year to 676 percent at the moment. Its responsibility for poor management is heavier than any other company.

Some even criticize that the shipbuilder caused a dumping war by pushing for low prices despite an increase in new shipbuilding orders after a prolonged recession in the shipbuilding industry, negatively affecting the entire South Korean shipbuilding market. It is truly a strange situation that the labor union is trying to protect the management’s tenure under these circumstances.

The union said it was to ensure business efficiency by maintaining shipbuilding experts in management positions for a while as Hanwha Group does not have relevant experiences. However, the result of shipbuilding experts’ management is 570 billion won of operating loss in the first half of this year alone. That’s why questions are being raised about the relationship between the management and the labor union at owner-less Daewoo Shipbuilding & Marine Engineering.

The labor union obtained the right to strike, with 72 percent of its members voting for it in a two-day vote held on Thursday and Friday. The union interrupted Hanwha Group’s due diligence in 2008 and protested against Hyundai Heavy Industries for the disapproval of its acquisition at the headquarters of the European Union in Belgium in 2019. The labor union’s interference with sell-off should not be repeated. If the acquisition fails again, the union should know that some call for the company’s liquidation rather than bottomlessly wasting more taxes.