▲ The headquarters of Daewoo Shipbuilding & Marine Engineering Co. (DSME) in central Seoul (Yonhap)

Daewoo Shipbuilding-emergency mode

Daewoo Shipbuilding shifts to emergency mode amid crisis

SEOUL, July 6 (Yonhap) -- South Korean shipyard Daewoo Shipbuilding & Marine Engineering Co. (DSME) put itself on an emergency management footing Wednesday in a bid to tide over a crisis and make a new leap forward.

DSME, the world's fourth-largest shipyard by order backlog, has been plagued by ballooning losses, soaring material costs, a manpower shortage, a prolonged wildcat strike by subcontract workers and an order cancellation due to the Russia-Ukraine war.

"All executives have been on an emergency footing, will take the lead in overcoming the current crisis and will make efforts to help the company keep growing," CEO Park Doo-seon said in a statement.

A recent recovery in orders has raised hopes for putting management back to normal, but those expectations have been shaken by a long illegal strike by those subcontract workers, he said.

Calling for a 30 percent wage hike and other measures, those subcontract workers have been striking since June 2 at the company's Okpo shipyard on the south coast, occupying a crude carrier under construction and thus disrupting its production.

DSME has clinched orders worth $5.47 billion so far this year, achieving 61.5 percent of its yearly order target of $8.9 billion.

Despite rising orders, the shipbuilder's operating loss came to 470 billion won in the first quarter of the year, 120 percent larger than a year earlier due to a spike in raw material costs and the prolonged war in Ukraine.

DSME's skyrocketing losses sent its debt-equity ratio surging to 547 percent as of the end of March this year.

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