“Mongjoon Jeong is coming to HHI to collect bills”
“They have been expanding their affiliates from sweets gathered by squeezing subcontractors. Now, they are not just squeezing to cut their deficit but asking for deaths.” (Manager A, HHI subcontracting company)
Continuous deficit for 6 quarters from Q4 in 2013 to Q1 this year has been reported; an accumulated deficit of 3.5 trillion won. This is the story of the world’s largest shipbuilding company, Hyundai Heavy Industry (refer to as HHI below). However, they had won victory after victory beforehand.
HHI’s affiliates are 27 (Dec 2014); Hyundai Merchant Marine, Hyundai Oil Bank, Hotel Hyundai to name a few. HHI was separated from Hyundai group in 2002 after ‘prince’s revolt’ and has expanded their affiliates from late 2000’s.
Starting with Hi Investment & Securities in 2008, they bought Hotel Hyundai in 2009 and New Korea Tour in 2012. In their M&A statistics after Feb 2010, HHI took over 5 companies spending 3,087,200,000,000 won. From this, 2,893,300,000,000 won was spent to buy Hyundai Oil Bank (94% of total investment).
Unforgotten shareholder’s dividends
The amount of holding share is also considerable. HHI, Hyundai Mipo Dockyard and Samho Heavy Industry have more than 3,100,000,000,000 won worth of sellable listed company’s stocks.
From an audit report in 2014 Q3, HHI holds almost 1,400 billion won; Hyundai Motors (4.4 million stocks worth 740 billion won), Kia Motors (88,000 stocks worth 490 billion won), Hyundai Elevator (217,000 stocks worth 12.9 billion won) and Hyundai Merchant Marine (23 million stocks worth 640 billion won).
Hyundai Samho Heavy Industry holds stocks valued at 1.5 trillion won; Hyundai Motors (2,265,000 stocks, 380 billion won), Hyundai Merchant Marine (10 million stocks, 288 billion won) and POSCO (1,308,000 stocks, 380 billion won). Hyundai Mipo Dockyard also holds 397,000 stocks in KCC worth 230 billion won.
HHI recently invested 248.6 billion won in Hyundai Hotel, their affiliate, in July this year. It was the sum of 73.5 billion won cash and 175.1 billion won investment in kind.
This is why it was pointed out that their deficit can be paid off by selling some of their stocks.
They also didn’t forget to pay shareholders. HHI gave 2.082 trillion won dividend in cash to shareholders from 2007 to 2014. From this, share dividend between 2010 and 2014 was 1.103 trillion won. It means they regularly gave share dividend even during the recession period of shipbuilding industry after the economic crisis.
Mr. Mong-joon Jeong, the largest shareholder of HHI received 61.5 billion won dividend in 2008, 61.6 billion won in 2009, 28,740 million won in 2010, 30.8 billion won in 2012 and 15.3 billion won in 2014.
The HHI CEO Mr. Jaesung Lee, who made the biggest deficit since its founding, received 3.699 billion won retirement bonus in Sep 2014. The salary of the board was also increased to 6.150 billion won, which was 1.950 billion more than 2014. They are continually making money while saying publicly there is a deficit.
Subcontractors were given nothing while dividends were paid and affiliates grew.
‘My effort and your fault’
Of course, business can’t always be good. HHI made 171 billion won business loss in the Q2 this year.
HHI is trying to make it up by restructuring of labor. 1,500 office workers were dismissed and it is going on for subcontractors. In July 2015, 3,000 subcontractors were fired. As 48 subcontracting companies closed down, subcontractors naturally lost their jobs and they were replaced with lower-cost subcontracting companies.
The reason why subcontracting companies shut down is due to the ‘smashing contracting price’.
This leads to the structure workers where are “dying on the job”. The flow of ‘low priced contract – insufficient budget – rushed completion time– low labor price –low price applied’ continues and the ‘rushed completion time’ plays a role of murderer in occupational injury.
It is the way they expand affiliates and divide more dividends to shareholders during boom times and pass deficits onto subcontractors in recessions.
“If there were no astronomical money divided to large shareholders, HHI could be well operated.”
Mr. Chang-min Ha, the director of HHI subcontracting branch said, “They took all profits and expanded more affiliates in surplus but didn’t share the profit with subcontractors. Now, they are passing the pain onto subcontractors in deficit”.
Mr. Ha also said, “Numerous subcontracting companies are bankrupted in line due to the ‘smashing contract price’ and subcontractors are exposed to deaths as well as delay in payment and dismissal in this circumstance. If there were no astronomical money divided to large shareholders, HHI could be well operated. There is no solution as long as shareholders are greedy. They are squeezing HHI to fill their pockets so subcontractors are squeezed as a result”.
Front page http://laborhealth.or.kr/41059 Preface of <The Cruel history of Shipyards> Click Table of Contents 1. Fall to sea! Why didn't they call 119 ? click 2. "Wish I could remove the word of 'suicide' covered with my husband" click 3. 13 deaths within a year at the 'death factory'... what happened? click 4. [Infographic] People in the 'hell ship', how were they killed? click 5. 'Shipyard ghost story', the same death in 2014 as 1994 again? click 6. Head opened, leg broken.. No Worker's Compensation! click 7. Blowing the whistle "How did I blackmail them?" click 8. 'Smashing' subcontracting companies, 'choking' workers click 9. "Occupational injury?" You didn't call 119, did you? click 10. "Nobody stops running on a single log bridge" click 11. "What is should be like... what it really is like" click 12. 'Old' blacklist, still valid? click 13. "Jeong Mong-joon is coming to HHI to collect bills" click 14. Pyramid contract 'Mul-yang team', causes death click 15. Norwegian Press reported 'Hyundai Heavy Industry Worker's fatality'... "Shocking information" click |
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