China Shipbuilding to go ahead with job-cut plans

China Shipbuilding Corp (CSC, 中船) will reduce layoffs to 2,800 and cut salaries before the end of this year, despite resistance from those who will be forced into early retirement, a company spokesman said yesterday.

China Shipbuilding had proposed cutting staff by 5,000, while those staying on the company will face a 35 percent salary cut starting next year.

Because the state-run enterprise's operational losses have accumulated to NT$10.5 billion in recent months, the Ministry of Economic Affairs (MOEA) instructed the firm to draft a "company readjustment program" -- a euphemism for personnel layoffs.

When the number of employees willing to accept early retirement failed to reach the target of 2,300, China Shipbuilding management made further selections based on performance and office attendance.

Many of those forced to retire questioned the fairness of the plan. A total of 2,001 employees signed a petition to the Bureau of Labor Affairs of the Kaohsiung City government and representatives of the employees submitted the petition to the bureau yesterday, hoping for a fair settlement.

A company spokesman said that 1,400 employees of the China Shipbuilding's Kaohsiung shipyard and 900 employees of the Keelung shipyard will be laid off. Most of those on the layoff list have agreed to accept the pensions offered to them. As for the more-than 200 employees who refuse to be forced into early retirement, the Bureau of Labor Affairs should help find a settlement, he added.

According to the spokesman, the company's management is compelled to carry out the layoffs because the MOEA requires the company to implement the program before it will grant China Shipbuilding a special rescue fund, which will include money for the pensions, along with re-investment capital.

The Executive Yuan has agreed to set aside NT$9 billion as a special pension fund for the company. In order to improve company operations, China Shipbuilding has asked the Cabinet for another NT$6 billion for reinvestment.

Officials said in September they would slash up to 6 percent of government jobs this year as the government tries to trim costs and pare a budget deficit amid Taiwan's worst-ever level of unemployment.

The government now employs about 300,000 employees in administrative departments and state-run companies and wants to cut 18,000 jobs from the state payroll this year and 19,000 next year.