Doosan Heavy Industries Overcomes Crisis... 'Labor-Management Conflict' Emerges as New Issue

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] Doosan Heavy Industries & Construction, which is overcoming a critical phase with support from government policy banks, is facing a new phase of labor-management conflict.

According to industry sources on the 25th, Doosan Heavy Industries & Construction is pushing for idle workforce furloughs and additional restructuring as part of a self-help plan, which has sparked opposition from the Metal Workers' Union Doosan Heavy Industries Branch (the union).

The union stated, "We oppose restructuring and furloughs being pushed forward without management responsibility and labor-management consultation," and has recently been holding simultaneous rallies in Seoul and in front of Doosan Heavy Industries' headquarters in Changwon. On the 22nd of this month, the union held a rally in front of Kyobo Tower in Gangnam-gu, where Doosan Heavy Industries' Seoul office is located, and delivered a letter to President Jeong Yeon-in of Doosan Heavy Industries urging the company to stop forced restructuring and furlough orders. Additionally, the union plans to hold rallies in solidarity with higher organizations such as the Korean Confederation of Trade Unions and the Metal Workers' Union to jointly respond to the furloughs and additional restructuring situation.

Earlier, in February this year, Doosan Heavy Industries received applications for voluntary retirement from about 2,600 employees aged 45 and older as part of fixed cost reduction measures. As a result, about 650 employees left the company as of the 1st of this month. Doosan Heavy Industries then introduced the card of 'idle workforce furlough.' Last month, President Jeong sent a 'request for consultation on business suspension' to the union. The union rejected this, stating that "the responsibility of management and the controlling family comes first."

Since then, Doosan Heavy Industries has been tight-lipped about the furloughs, but the spark of labor-management conflict is growing. The creditor banks, including the Korea Development Bank and the Export-Import Bank of Korea, provided 1 trillion won in support while demanding a high-intensity self-help plan from Doosan. It is known that Doosan Heavy Industries included furloughs and additional restructuring in the self-help plan in response to the creditors' demands. Upon learning of this, Doosan Heavy Industries issued a disclosure stating that "nothing has been decided yet" and began to manage the internal atmosphere. A Doosan Heavy Industries official also said, "We are reviewing paid furloughs for some idle personnel and additional voluntary retirement, but nothing has been decided." On the other hand, within the union, there is suspicion that "after the general election, they will gauge the political response and eventually push for voluntary retirement and furloughs."

In the industry, it is also viewed that furloughs and additional voluntary retirement for fixed cost reduction are inevitable for Doosan Heavy Industries, which still has many hurdles to overcome. After the 1 trillion won support, the Export-Import Bank of Korea converted Doosan Heavy Industries' 500 million dollar foreign currency bonds into loans, helping the company overcome the immediate crisis, but the borrowings that Doosan Heavy Industries must repay by the end of this year amount to about 4.2 trillion won. The company also needs to resolve the 500 billion won scale of convertible bonds with warrants (BW) expected to be called early next month. Furthermore, Doosan Group is facing difficulties in selling Doosan Solus shares, which were prepared as part of the self-help plan.

This content was produced with the assistance of AI translation services.