South Korean shipbuilder Hanjin Heavy Industries and Construction Philippines has filed for a voluntary financial rehabilitation due to ballooning financial obligations to Philippine and Korean lenders.
The company said it doesn’t have enough cash to repay its loans, and that it cannot continue with its operations under these circumstances
Labor Secretary Silvestre Bello III has called for an emergency meeting with labour officials to discuss the possible impact to workers of Korean ship making Hanjin Heavy Industries and Construction Corporation filing for bankruptcy.
Department of Labor and Employment (DOLE) Secretary Silvestre Bello III speaks during the ASEAN Labor Ministers’ Retreat in Davao City. (Keith Bacongco)
“The emergency meeting is to discuss the possible measures that will help cushion the impact of the Hanjin issue,” he said in an interview.
Bello also assured the would-be affected workers that they will assist them in re-employment to other related jobs such as in construction under the Build, Build, Build program of the government since Hanjin workers are highly skilled and in demand both here and abroad.
“But we prefer that they are employed here in the country first as we need their skills in welding, steel shipbuilding, construction, and plant services for the Build, Build, Build,” he said.
Bello added that he is set to meet with the Department of Trade and Industry, Department of Transportation, and the Department of Public Works and Highways for possible re-employment of Hanjin workers in various projects of the government.
Based on reports, among Hanjin’s financial woes that are at the core of its decision to apply for corporate rehabilitation at the Olongapo Regional Trial Court is its standing $400 million debt to local lending banks.
Due to this, some 3,000 employees of the firm are feared to be at risk of losing their jobs.
Hanjin Philippines was established in 2006 as a subsidiary of Hanjin Heavy Industries & Construction Co. Ltd., a multi-national company that provides construction, shipbuilding, and plant services in South Korea and internationally.
With some $2.3 billion in foreign direct investments in the Philippines, the SBM said the firm proceeded to manufacture some of the world’s biggest cargo and container ships, bulk carriers, liquefied petroleum gas carriers, huge crude oil carriers, and very large ore carriers.
Hanjin Philippines has delivered 123 vessels to valued clients across the globe since 2008, thus cementing its foothold in the highly competitive shipbuilding market.
In the course of its operation, the company became the biggest employer among all registered businesses in the Subic Bay Freeport Zone with some 30,000 employees during its peak and was recognized by both the Philippine Exporter Foundation (Philexport) and the Department of Trade and Industry (DTI) as a top export performer.
However, in the face of the recent liquidity problem, Hanjin Philippines has laid off more than 7,000 workers last December.
The firm is about to lay off another 3,000 early this year until its workforce is reduced to just about 300 local workers and as few as seven Korean supervisors by March to do facility maintenance, she added.
The labour group Nagkaisa urged the government to intervene and save the jobs of thousands of workers.
“These workers have sacrificed for many years to keep the shipyard going. Some of them even lost their lives due to the company’s negligence. We can’t let all their sacrifices be wasted,” said Atty. Sonny Matula, chairperson of Nagkaisa! Labor Coalition in a statement.
“We highly recommend that government takes over the financial rehabilitation and operation of the shipyard,” he added.
Nagkaisa said it is also inclined to cooperate with others in the spirit of social dialogue to save the jobs of thousands of workers in Hanjin.
“We request that a joint task force is formed with DOLE, DTI (Department of Trade and Industry) and DOF (Department of Finance) with employers’ groups and trade unions to develop an industrial plan around shipbuilding urgently,” Matula said.
Nagkaisa, however, expressed caution over a Chinese takeover of Hanjin saying allowing the shipyard to fall in the hands of China may have security implications.
“We encourage the government to explore technical cooperation with other shipbuilding countries that have no territorial ambitions in the region such as Norway,” Matula said.
“Apart from the fact that Norway has a robust shipbuilding industry such as the Aker Group and offers and gives assistance and employment to our seafarers, our country also has a close relationship with Norway in the peace process with the National Democratic Front (NDF),” he added.