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(LEAD) Doosan Heavy mulling paid leave to idle employees amid deepening crisis

All News 17:39 March 11, 2020

(ATTN: UPDATES with company's comments in 4th para, closing share price in 8th para, union official's comments in paras 12-13)
By Kim Kwang-tae

SEOUL, March 11 (Yonhap) -- Doosan Heavy Industries & Construction Co., South Korea's largest power equipment maker, said Wednesday it is considering asking idle workers to take paid leave as part of efforts to cut costs amid dwindling orders.

Doosan Heavy said idle workers can receive 70 percent of their basic monthly wage for up to three months. The planned paid leave is subject to endorsement of Doosan Heavy's labor union.

Doosan Heavy said it had 6,700 employees at the end of December, though it did not give details on the number of idle workers.

The company ruled out either a total or partial suspension of the plant in the southeastern industrial city of Changwon, noting that the paid leave is designed for a limited number of idle workers to ensure operation is not affected.

In this photo provided by Doosan Heavy Industries & Construction Co., workers assemble a gas turbine at the company's plant in Changwon, about 400 kilometers southeast of Seoul. (PHOTO NOT FOR SALE) (Yonhap)

"We need more substantial emergency management measures," Jung Yeonin, Doosan Heavy chief operating officer, said in a message to the labor union, according to the company.

He said Doosan Heavy could not afford financial costs due to the company's declining sales and net losses in recent years.

Doosan Heavy posted accumulated net losses worth 2.68 trillion won (US$2.24 billion) from 2014 through 2019.

Shares in Doosan Heavy fell 21.44 percent to 3,590 won, far underperforming the broader KOSPI's 2.78 percent decline.

Jung said orders worth about 10 trillion won have dried up due to the cancellation of projects of nuclear and coal-fired plants in South Korea.

South Korea decommissioned two nuclear power plants in 2017 and 2019 as part of its policy to boost the supply of power from clean and renewable energy sources while weaning the country off nuclear and coal-fired plants.

South Korea is set to retire 10 out of its total 24 reactors on its soil by the end of 2030.

An official of Doosan Heavy's 1,730-strong labor union called on the company to sit down for talks on the issue in May when the two sides are set to discuss wages and a collective bargaining agreement.

"The management is to blame for the problem, not workers," the union official said by phone from Changwon.


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