Vietnam shipbuilder’s subsidiaries stick with mother ship

Subsidiaries of the troubled Vietnamese state shipbuilder Vinashin on Monday denied local press reports that they were seeking to exit the company.

Subsidiaries of the troubled Vietnamese state shipbuilder Vinashin on Monday denied local press reports that they were seeking to exit the company.

But workers at some subsidiaries said they had suffered layoffs and salary delays because of the conglomerate’s financial problems and a government reorganization.

The government announced a restructuring of Vinashin on July 1 after an audit found it had a debt load of 4.6 billion dollars. Five senior executives, including two former chief executives, have been arrested for mismanaging state assets.

‘Despite the uncertainties, I still want to stick with Vinashin,’ said Pham Hong Diep, chairman of Vinashin Trading and Manufacturing JSC (Shinec) in the northern port of Haiphong.

The newspaper Thanh Nien reported Friday that Shinec, which makes parts for ships, was seeking to leave Vinashin and go independent. Diep said the report was untrue and that use of the Vinashin brand continued to be advantageous for the firm.

He said Shinec had yet to fire any workers because of the troubles at the parent company and owed no back salaries.

Workers at other subsidiaries have not been as lucky. The One Member Shipbuilding Co, a branch of Vinashin’s Ha Long Shipbuilding Industry Corp, is down to 5,100 employees from 7,000 this spring, according to master welder Vu Van Si, 28.

‘My salary has been cut because we don’t have enough work,’ Si said. ‘We’re building a 53,000-ton ship, but the company doesn’t have the money to import the materials.’

The news website VietnamNet reported Monday that two half-finished Vinashin shipyard projects had yet to pay compensation to the farmers they had displaced. The shipyards themselves might never be completed.

One of those shipyards, in the Mekong Delta province of Hau Giang, was intended to be capable of building 50,000-ton vessels by this year. Villagers in the area said they received 50,000 dong (2.50 dollars) per square metre for their farmland and have received nothing for their houses.

In the province of Tien Giang, also in the Delta, the Soai Rap Shipbuilding Industrial Park project was supposed to employ more than 1,000 workers.

The project, approved in 2007, never got beyond the land-clearing stage. Local authorities said they are paying 5.2 million dollars per month for a water-treatment plant that was to service the industrial park.

Vinashin was scheduled to make a complete report of its debts to the government Monday.

Vinashin got into financial difficulties when it diversified beyond its core business and the global recession hit its revenues. It left the company unable to keep up with its debt repayments and resulted in salary cuts for more than 70,000 employees and the dismissal of 5,000 others, the government said.

As of the end of June, Vinashin had assets worth 90 trillion dong, or about the same as its debts, the government said.

Several economists have criticized the government for offering Vinashin unjustified state support, including a 750-million-dollar state loan in 2005 financed by a bond sale.

Tags: Vietnam Shipbuilding industry, Vinashin