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HMM makes incentive payments to boost morale    16/05/2018
Hyundai Merchant Marine (HMM), which has frozen salaries since 2010, has started making incentive payments, amounting to 3% of current salaries, in an attempt to boost staff morale.

The 2014-built 145,979 dwt Hyundai Drive.

2014-built 145,979 dwt Hyundai Drive. Credit: Dietmar Hasenpusch

The amount was proposed by HMM’s main creditor and shareholder, the Korea Development Bank (KDB).

HMM is now South Korea’s flagship carrier after Hanjin Shipping went bankrupt in February 2017, but had weathered several challenges and escaped bankruptcy in 2016 after reaching charter renegotiations with its tonnage providers. Subsequently, after a debt-for-equity swap, KDB and other banks replaced Hyundai Group as HMM’s largest shareholder.

Profitability remains elusive for HMM, which had a loss in 2017 and the first quarter of 2018. The loss in 2017 means that HMM was operating at a loss for five of the past seven years.

A company source told Fairplay, “You can’t really call it a bonus, as we haven’t raised salaries since 2010. Morale has been low and staff turnover has been high as our salaries haven’t been competitive. So this one-off payment aims to boost morale.”

Back in 2010, bonuses amounted to 80% of regular salaries and HMM had 2,000 onshore employees then. However, as the container liner industry began struggling from 2011, bonuses and annual increments were suspended across all levels.

HMM is determined to get back on track and cement its status as South Korea’s flagship carrier.

The company plans to order 20 large container ships and expects to reduce handling costs with the acquisition of a 50% stake in a terminal in Busan New Port.


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