South Korea’s Big Three Shipbuilders Face Last-Minute Wage Negotiation Turmoil — Joint Strike Looms if No Deal Before Chuseok
Wage and collective bargaining negotiations at South Korea’s three largest shipbuilders have reached a critical juncture ahead of the Chuseok holiday. The HD Hyundai Heavy Industries union is engaged in partial strikes, the Hanwha Ocean union is alternating between full and partial walkouts, and the Samsung Heavy Industries workers’ council is increasing pressure through protests in Seoul. The Shipbuilding Industry Union Alliance, comprising unions from eight shipyard workplaces, has issued a warning that unless management presents an acceptable proposal by September 18, they will launch an all-out struggle, including a joint strike after Chuseok.
Strikes and Negotiations
At HD Hyundai Heavy Industries, partial strikes have been ongoing for a second consecutive day. Despite more than 20 rounds of negotiations since June, both labor and management have failed to bridge the gap on wage increase methods and performance-based pay distribution. Management’s recent proposal, including a base salary increase of 110,000 won, was rejected by the union, which is demanding a higher increase and a larger share of operating profits.
Meanwhile, at Hanwha Ocean, the situation is more severe, with the union conducting partial and full strikes since August 31. Despite management’s proposal being rejected, negotiations continue with demands for higher base salary increases and bonuses. Samsung Heavy Industries has not yet entered a strike but workers’ protests in Seoul indicate escalating tensions.
Potential for Joint Strike
The Shipbuilding Industry Union Alliance has warned of a joint strike if no settlement is reached before Chuseok. Mediation applications and strike authorization votes have been approved at several workplaces, and a full-scale struggle plan, including a joint strike, is being considered post-holiday if acceptable proposals are not presented by September 18.
Concerns Amid Industry Supercycle
Industry observers are concerned about the potential impact of a prolonged strike on the shipbuilding industry, especially given the current supercycle with a substantial order backlog. Delays in production could lead to cascading disruptions in construction processes, affecting delivery schedules and raising worries about future growth engines.
Vice Minister of Trade, Industry, and Energy Moon Shin-hak highlighted the importance of the shipbuilding industry for employment and the economy, emphasizing the need for a resolution to avoid further disruptions amidst a surge in global demand for vessels and warships.
The shipbuilding industry is facing challenges as negotiations continue, with the potential for significant implications on both domestic and global markets.
