Report: STX Offshore rolls out early retirement plan to address ordering slump
- Business & Finance
Korean shipbuilder STX Offshore & Shipbuilding Co is planning to reduce its workforce to adapt to lower demand by launching a voluntary retirement plan, Yonhap reported citing a statement from the shipyard.
Workers at the yard have been on strike since May amid dissatisfaction with unpaid furloughs which have affected around 500 workers.
The walkout has resulted in the shipbuilding activity being suspended until July 12, Yonhap said.
Based on the statement, the shipbuilder is likely to suspend work at its shipbuilders if market conditions continue to worsen.
STX Offshore failed to secure any orders during the first half of the year due to a prevailing slump in the shipbuilding sector due to the coronavirus pandemic, according to Yonhap. There are only seven orders in the backlog set for delivery in 2021.
Owners have been staying clear from ordering newbuilds as they face demand drops in various trading sectors due to the pandemic. Scarce availability of capital to finance newbuilding orders has also contributed to keeping ordering activity low.
Fierce competition from other Asian shipyards has not helped either STX Offshore to overcome the difficult financial position it has been in for over seven years now.
During this period, the cash-strapped shipbuilder has been fighting to restructure its business in cooperation with its creditor the Korea Development Bank.