In addition to yesterday's management reshuffle at state-run China Shipbuilding Corp (
"China Shipbuildings' survival is greatly threatened if it continues to focus on its current core business of shipbuilding," said Chang Yue-shan (
While world demand for shipbuilding has slowed, even if the orders were out there the uncompetitive beast could not compete with the shipbuilding prowess of Japan and South Korea, Chang said.
"Foreign shipbuilders can make ships cheaper and better than China Shipbuilding," he said.
The company should upgrade its manufacturing process and focus its energy on designing naval vessels for national defense while commissioning some of the manufacturing work out to independent contractors, he said.
The greatest hurdle facing the new management team may be the same as that for many of Taiwan's state-run company's -- making the unplesant but necessary decision to fire overpaid and redundant personnel.
"An economic solution to improve the company is easy, but it will take administrative fortitude to take drastic action," he said.
Established in 1976, China Shipbuilding has a reported a book value of NT$2 billion, but it is most likely operating deep in the red, opposition legislators believe.
Last year the Cabinet injected NT$6 billion into a plan to help revive the company through "re-engineering," and has slated NT$9 billion to fund futher restructuring this year, in combination with an early retirement program.
"After reducing the number of employees, the company turned losses into gains in the first quarter, with nearly NT$200 million in revenue," head of the company's union Chang Chien-chang (
The company laid off over 2,200 workers and implemented a 35 percent cut in salary.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
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