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Korea Report - November, 2015.
While both HHI and SHI maintained
their current management to work out the carried over troubles, other yards
appointed new CEOs to tackle the massive broadscale restructuring task. DSME,
STX and Daehan in May this year appointed Jung Sung-leep, Lee Byung-mo and Han
Seong-hwan as their new CEOs (all from DSME). Sungdong recently appointed Kim
Chul-nyun from SHI, as their new CEO. They are expected to engage
in painful restructuring efforts starting this month as they struggle to cope
with the present market downturn. The restructuring that will affect HHI, SHI
and DSME, as well as many smaller sized companies, could result in the
streamlining of operations, and the laying off of some 10,000 workers in the
next two to three years. The latest market crisis can also lead to less
competitive yards going bankrupt in the face of dwindling orders. Reflecting
this, the government has made clear that the market needs to sort itself out
with weaker companies being allowed to fail. Government stated that companies
that cannot float on their own need to be ousted. Highlighting such
developments, DSME already agreed to implement changes that can lead to the
layoff of upwards of 30 % of its workforce in 2016. Besides Daewoo, HHI and SHI
that had all engaged in restructuring last year may have to follow through with
additional cost cutting measures. It seems that in the next couple of years,
there will likely be a move to merge failing companies into bigger yards that
can compete more effectively with overseas rivals. Through the move, Korean
shipbuilding industry will form a shape as the real leader of the global
industry.
TOPICS.
SKorea and Iceland agreed to strengthen cooperation on the
Arctic region (p.2)
SKorea¡¯s
National Assembly ratified the long-delayed FTA with China (p.2)
SKorea
to reinstate history textbooks for secondary education from 2017 (p.3)
Government plans to build a second airport on the Jeju
Iseland (p.5)
Two
Koreas and Russia have been pushing for the ¡°Rajin-Khasan¡± project (p.7)
Moody¡¯s
kept SKorea¡¯s sovereign credit rating at Aa3, citing strong fiscal conditions (p.8)
Korea's fiscal soundness is one of the most sustainable
among OECD member (p.8)
Kakao Corp and KT Corp have emerged as winners for Korea¡¯s
first Internet-only banks (p.10)
Hyundai companies commemorated 100th birth
anniversary of founder Chung Ju-yung (p.11)
Samsung Group's governance structure simplified by a series
of mergers and asset sales (p.11)
HMC launched ¡°Genesis¡± as flagship brand (p.13)
Terrorist attacks in France shook Korea¡¯s bourse and money market (p.15)
New CEOs of Korean yards are to
tackle the massive broadscale restructuring task (p.15)
HHI is to forge a partnership with Aramco in the development of a maritime yard in Saudi (p.18)
Creditors agreed to inject KW4.2 tril ($3.68 bil) into DSME
to help it get back on track (p.19)
SPP failed to secure RG for newbuilding order for 8
tankers (p.20)
SK E&S received final bids from
Big 3 for up to 4 LNG carriers at the end of Nov (p.21)
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