Workers bear brunt of Hanjin’s woes | Inquirer Business

Workers bear brunt of Hanjin’s woes

Labor group says employees’ compensation, separation packages should be prioritized before Korean shipbuilder pays creditors, investors
/ 05:16 AM January 15, 2019

Workers bear brunt of Hanjin’s woes

BIGGEST EMPLOYER The shipyard run by Hanjin Heavy Industries and Construction-Philippines is the biggest employer at Subic Bay Freeport, with its workforce peaking at 30,000. The company, however, has filed for corporate rehabilitation due to its outstanding loans from local and foreign lenders. —CONTRIBUTED PHOTO

SUBIC BAY FREEPORT — Barely a year ago, the world’s biggest commercial ship was unveiled here, thanks to the craftsmanship of Filipino workers of South Korean shipbuilding company Hanjin Heavy Industries and Construction-Philippines.

The mammoth container vessel, named CMA CGM Antoine de Saint Exupery, symbolized good job opportunities in the years to come, according to the workers.


But economic and industry forces beyond their control have dashed the hopes of Hanjin’s workforce that at its peak reached 30,000.


On Jan. 8, the company that operates at the Subic shipyard filed for corporate rehabilitation at the Olongapo City Regional Trial Court to protect it from its creditors.

The company owes $400 million in outstanding loans from the country’s banks, on top of another $900 million borrowed from lenders in South Korea.



A labor group said the compensation and separation packages of the workers should be prioritized by the debt-trapped shipbuilder before it paid its creditors and investors.

Leody de Guzman, Bukluran ng Manggagawang Pilipino chair, also said the government should safeguard the interest of workers against capital flight.

Last month, the company laid off more than 7,000 workers and planned to dismiss 3,000 more in early 2019 and retain only 300 personnel at its shipyard off the free port’s Redondo Peninsula, according to the Subic Bay Metropolitan Authority.

De Guzman said the Labor Code protected workers by giving them priority over other creditors in case of bankruptcy.


De Guzman said Hanjin’s filing of insolvency should serve as an eye-opener for the government to rethink its strategy in attracting foreign direct investments.

Since 2016, Hanjin and its Subic affiliate had been suffering from a drop in new orders amid the prolonged downturn in the global shipbuilding industry.

Hanjin workers saw it coming months earlier.

According to Samahan ng mga Manggagawa sa Hanjin Shipyard (Samahan), Hanjin management, through its subcontractors, first issued a temporary layoff memorandum on Oct. 27 last year, affecting about 1,000 workers.

Workers bear brunt of Hanjin’s woes

WORKERS’ CONCERN Hanjin workers worry about the impact of the shipyard’s financial problems on their families. —CONTRIBUTED PHOTO

“The actual layoff took place on Nov. 26 and we were told that more workers would be laid off until March 2019,” said a worker, who requested anonymity.

Asian Core Inc., one of Hanjin’s subcontracting companies, closed shop, citing financial losses, decrease in sales and lack of orders for shipbuilding, among other things.

On Nov. 26, Yongchul An, administrative director of Asian Core Inc., informed Zenaida Angara-Campita, Central Luzon director of the Department of Labor and Employment (Dole), about the company’s decision to close.

“The management has decided to cease its operation on Dec. 15, 2018. Rest assured that separated employees are properly compensated,” An said in a letter to Campita.

Empty promises

Hanjin workers said some of the subcontracting companies promised to call them back should orders for new ships arrive this year.

But Samahan said these were empty promises. “After working round the clock to finish and deliver these ships on time, now we’re losing our jobs,” the group said.

“Some [workers] even died while at work and this is what we get after sacrificing our lives for the company,” it said, adding that they saw a pattern in Hanjin’s move to retrench workers after the successful completion of ship orders like in 2013 and 2016.

Safety net

The Trade Union Congress of the Philippines (TUCP) urged the Dole on Monday to draw up a safety net mechanism to help cushion the impact on workers of the shipyard’s impending closure.

“It could become a national economic and security disaster issue for the country if we just stand by and do nothing,” TUCP president Raymond Mendoza said.

When the Antoine de Saint Exupery was unveiled at Hanjin shipyard on Jan. 25, 2018, President Duterte praised Filipino workmanship for building what he described as a “gigantic and technologically superior vessel.”

The 20,600 TEU (20-foot equivalent unit) class container vessel—400 meters long, 59 m wide and 33 m deep—underscored Hanjin’s “vital role in our country’s maritime industry,” Mr. Duterte said in a prepared speech.

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But he reminded Hanjin officials to protect the welfare of their workers. —With a report from Jovic Yee

TAGS: Hanjin Heavy Industries and Construction-Philippines

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