Mon, Apr 20, 2009 - Page 12 News List

CSBC to run idle on Israeli order loss

LAYOFFS Fears spread that the cancelation of nearly 20 months of orders may prompt the ship builder to lay off employees or cut its payroll, but executives said not to worry

By Wang Yi-hong  /  STAFF REPORTER

China Shipbuilding Corp, Taiwan (CSBC, 台灣國際造船), the nation’s largest shipbuilder, will have no orders starting in November for 20 months after Israeli client Zim Integrated Shipping Services Ltd canceled its orders for six 1,700 twenty-foot equivalent unit (TEU) ships, the Liberty Times (the Taipei Times’ sister newspaper) reported yesterday.

The cancelation could impact on the company’s previous contracts with local clients, including Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines Ltd (萬海航運), which may face postponement of deliveries, the report said, citing a letter from the firm’s union.

Fearing that they could lose their jobs because of a falling workload, nearly 500 company workers in Keelung plan to visit the firm’s Kaohsiung headquarters soon to urge the builder to avoid resorting to layoffs or salary cuts.

Admitting there were fewer orders at its Keelung shipyard, CSBC president Li Chih-cheng (李志城), however, urged workers not to panic, saying there would still be work to do.

Following canceled orders by Zim, the company was in active talks with potential clients such as state-run Taiwan Power Co (台電) and CPC Corp, Taiwan (中油) for new orders, Lee said.

CSBC vice president and spokesman Wang Ko-hsuan (王克旋) said that the company understood workers’ concerns, but the situation was really not so bad.

Moreover, the company could also bid for public works (to offset losses), he said.

Wang said that the company had promised during its initial public offerings that under normal circumstances it would not lay off staff or cut pay within five years.

However, CSBC does not rule out layoffs and pay cuts if economic conditions continue to deteriorate, Wang said.

Last year, CSBC reported revenue of NT$35.65 billion (US$1.05 billion). Net income was NT$846 million, or NT$1.27 in earnings per share.

The company built about 16 ships last year, although it is capable of manufacturing up to 18 ships a year, Li said.

For this year, the company estimated that it would have an output of between 14 and 15 ships, he said.

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