HD Hyundai Heavy Industries on Brink of Strike Over 30% Operating Profit Bonus Demand
In South Korea, a labor-management conflict over the distribution of performance bonuses based on a percentage of operating profit is escalating within the manufacturing sector. Following Hyundai Motor’s first full-scale strike in ten years, the union at HD Hyundai Heavy Industries, a prominent player in the shipbuilding industry, is also moving towards strike action. As unions in various industries demand a fixed percentage of operating profit as bonuses and resort to hardline tactics, companies are facing challenges in securing future investment capital and managing their earnings for the second half of the year.
NLRC Mediation and Strike Vote
Industry sources have revealed that the National Labor Relations Commission (NLRC) will convene a second meeting on August 24 to mediate the labor dispute filed by the Korean Metal Workers’ Union Hyundai Heavy Industries Branch. It is expected that a final decision will be reached during this meeting due to the significant gap between the positions of labor and management. The NLRC is likely to decide on the “suspension of mediation,” granting the union the legal right to engage in industrial action. If this decision is made, the union plans to conduct a strike vote among its members from August 25 to 27 to proceed with a strike if approved.
Spreading Demands Across Industries
The demand for performance bonuses based on a percentage of operating profit is spreading rapidly across the shipbuilding industry. Unions at HD Hyundai Samho, Hanwha Ocean, and Samsung Heavy Industries are also demanding improvements to bonus payment standards. The implementation of the “Yellow Envelope Act” has further intensified demands from subcontractor unions, adding pressure to the shipbuilding industry. Concerns have been raised about the impact of diverting current profits towards short-term bonuses on the industry’s global order competitiveness and future investments in essential technologies.
As the labor-management conflict extends beyond the shipbuilding industry, automakers like Hyundai Motor and steel companies such as POSCO are also facing challenges. Hyundai Motor’s union has already conducted a full-scale strike, leading to significant production disruption and revenue losses. The steel industry is on the verge of a potential partial strike if negotiations between the POSCO union and management fail to reach a resolution.
The ongoing conflicts highlight the need for a balanced approach that considers both labor and management interests to ensure the sustainability and competitiveness of South Korea’s manufacturing sector.
