Control Yuan tells China Shipbuilding to make a profit

Control Yuan members called yesterday for the troubled state-owned China Shipbuilding Co (中船) to close if it does not achieve a financial surplus within two years.

The call by the Control Yuan, the highest body charged with supervising the conduct of officials and state-run organizations, is not binding, but places pressure on the Ministry of Economic Affairs, which is responsible for the company.

Control Yuan members discussed a reform plan that maps out how the company can turn its deficit into a surplus, which was activated at the end of last year, with officials from relevant government department.

The company has long suffered a serious deficit due to an over-supply in the international market, and the "unreasonably high salary levels of the company's employees," according to a report from the Ministry of Economic Affairs.

At yesterday's meeting, the company's chairman, Hsu Chiang (徐強), stressed that the plan has had some success including an 35 percent reduction in salary levels, which originally averaged NT$72,000 per month, and the laying off of 2,342 people to allow the company to generate an operating profit of NT$124 million in the first half of this year.

Hu Sheng-cheng (胡勝正), a minister without portfolio, said that the company should balance its books by the end of next year.

"The company has to exist, because one of its missions is to maintain navy vessels," Hu added.

However, Control Yuan member Kuo Shih-chi (郭石吉) said that the government has injected about NT$100 million into the company in recent years in a bid to balance its books. "How can the public be confident about this company's operations?" he said.

Another Control Yuan member, Ma Yi-kung (馬以工), echoed Kuo's view, saying that "once the reform plan had proved itself unworkable," the company should prepare to close down in order to prevent any further waste of government funds.