Workers at Croatian Shipyard Uljanik Go on Strike

Some 4,500 workers at Croatia's largest shipbuilding group Uljanik went on strike on Wednesday and called for management to step down in protest over late payment.

"The management has lost credibility in our eyes, the workers and suppliers have lost confidence," one union leader, Marina Cvitic, said.

Uljanik controls two docks in the northern Adriatic, in the cities of Pula and Rijeka.

The workers control less than 50 percent of the company, with the state also a minority shareholder. Its other owners include local banks and the country's top insurer, Croatia Osiguranje.

The workers gathered in front of the dock entrance calling for new management.

"It's not just about a salary, but about our future. We want new people who will be able to manage the company better," said Boris Cerovac, another union representative.

Last January the European Commission cleared Croatia's state guarantee for a loan worth 96 million euros ($109.80 million) to help the shipyard stay afloat.

Croatia's once prosperous shipbuilding industry has been struggling to survive in the last decades as it lost business to mostly Asian shipbuilders, such as South Korea.

Uljanik's problems are also a potential threat to state coffers as the government has extended guarantees worth several hundred million euros for loans to the shipbuilder.

The company's management said it was working on securing funds for July's salary, but could not guarantee the date of payment.

The government also said it was trying to find a solution. European Union rules do not allow state financial help.

Earlier this year Uljanik chose a local firm Kermas Energija as its strategic partner and submitted a restructuring plan which was forwarded to Brussels for approval, which is pending.

Kermas Energija owns another dock in Croatia, in the southern town of Trogir, where workers there have threatened to go on strike, but management has promised that the July salary will be paid by the end of this week.

Privatization and restructuring of its docks was a key requirement for Croatia's accession to the EU in 2013 as the government had to stop providing subsidies and prepare its shipyards to survive on the market. In the past Croatia spent some 30 billion kuna to save its shipyards, some estimates say.

($1 = 0.8744 euros)

($1 = 6.4990 kuna)

(Reporting by Igor Ilic, editing by Louise Heavens)