Taiwan's debt-ridden, state-run China Shipbuilding Corp (CSC, 中國造船股份有限公司) is keen to find a buyer on the condition that its 3,500-strong workforce be maintained, company officials said yesterday.
"The buyer can be from Taiwan or abroad. It does not have to settle our debts for us," CSC deputy president Liou Wu-hsien (
CSC is hoping that a buyer can be found to avoid bankruptcy, but local economists have cast doubt on the feasibility of keeping its entire workforce, questioning the value of CSC to any acquirer.
The company has its main shipyard in Kaohsiung, with a smaller shipyard in Keelung.
A Ministry of Economic Affairs (MOEA,
But, Liu said, CSC had received enough orders to continue operating until the first half of 2002.
Liu pointed out that CSC's debt crisis is to due to the sluggish world shipbuilding market, which has seen a 20 to 50 percent drop in ship prices, and keen competition from Japan and South Korea.
These countries compete by taking advantage of the established peripheral industries which support shipbuilding, industries which Taiwan lack.
In the past few years, 80 percent of CSC's orders for merchant ships, the company 's major product, have come from abroad, including Denmark, Germany, Greece, Norway and France.
"We hope the government can let CSC build warships for the Taiwan Navy instead of buying them from abroad," he said.
CSC has made ammunition replacement ships, landing ships and missile craft for the Taiwan Navy, including eight Perry-class frigates.
Commenting on the future of debt-ridden state-run companies such as CSC, economists argue that the primary question comes down to whether Taiwan's shipbuilding industry would remain competitive enough to be maintained.
"If China Shipbuilding can find a new buyer, it is still questionable whether the company would agree to keep all its existing employees," said Chang Ching-hsi (張清溪) from National Taiwan University.
"It does not make economic sense for one state-run company, which can not make a profit, to be subsidized the large cost of maintaining its workforce, a sum which ultimately comes from tax payers," Chang added.
"I think it is unnecessary to maintain an ailing company which may be difficult to revive, unless there are national policy considerations," Weng Yung-ho (翁永和), an economics professor from National Chengchi University said.
"Such considerations may be national security issues surrounding shipbuilding,"
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