Kawasaki Heavy will cut shipbuilding workforce by a fifth
Japanese group looks to reassign workers to robot, rail car operations
TOKYO -- Kawasaki Heavy Industries plans to eliminate around 20% of the positions in its money-losing shipbuilding division, part of a restructuring that will downsize one shipyard and see another focus on submersibles and other specialty vessels.
At least half of the roughly 400 job cuts will result from employees reaching retirement age and reductions in hiring. Kawasaki Heavy will consider how to reassign the remaining displaced workers.
The Tokyo-based group has announced plans to close one of its two docks at Sakaide, a port city on Japan's Seto Inland Sea. This shipyard, which has built mainly liquefied natural gas carriers, is expected to stop producing new vessels in 2019 in light of a dearth of orders. Kawasaki Heavy plans to transplant some processes for thriving operations, such as robot or rolling-stock manufacturing, to the facility.
The company's Kobe works will embark on producing higher-value vessels, including autonomous underwater vehicles used to maintain seabed oil and gas infrastructure. The company seeks to develop such a vehicle for European oil majors by 2020.
The Kobe shipyard will also build high-speed jet ferries, a type of hydrofoil, for which it currently expects three orders, one of them in June from Japanese ferry operator Tokai Kisen. Work on a liquefied hydrogen carrier will begin next year, and the facility will seek orders for research vessels as well.
Weighed down by high fixed costs, Kawasaki Heavy's ship and offshore structure segment logged an operating loss of 21.4 billion yen ($192 million) for the year ended March 31.
Before announcing plans in March to slash 30% of its domestic shipbuilding, the company considered spinning off the segment or seeking a merger with industry peers. But it decided to restructure on its own in light of the need for internal technical coordination to engineer such high-tech ships as liquid hydrogen carriers.
Kawasaki Heavy aims to raise the segment's return on invested capital to at least 8% by fiscal 2020.