Specter of crippling strike looms over Korean shipyards
Members of HD Hyundai Heavy Industries’ (HHI) union count votes on a strike proposal at the company’s headquarters in Ulsan, July 24. Courtesy of HD HHI’s union Labor unions threaten to put brakes on shipbuilding industry boom
By Park Jae-hyuk
Concerns are growing that a potential labor dispute may dampen a long-awaited boom in the shipbuilding industry, as unionized shipyard workers prepare to strike in August, according to industry officials, Wednesday.
HD Hyundai Heavy Industries’ (HHI) union secured the legal right to down tools earlier this week, as the National Labor Relations Commission halted its arbitration process between the shipbuilder’s labor and management after union members approved a strike in a three-day vote last week.
The workers claimed that management has remained silent on their request to hike this year’s base monthly wage by 159,800 won ($116) on average, revise the rules on performance-based bonuses and extend the retirement age to 64.
“Despite the current shipbuilding industry boom, our members cannot be optimistic about their future,” HD HHI’s union said in a statement. “This resulted from the company’s distorted system intended to give all the benefits to the owner family.”
Once the two weeks of summer vacation ends next week, the union will discuss when and how to strike.
Although the workers are still open to dialogue with the management, they joined hands with the unions of Korea’s seven other shipbuilders for a general strike in August.
Hanwha Ocean’s union held a seven-hour strike on July 15, as 86 percent of its members voted to support the move.
Workers at Hanwha Group’s shipbuilding unit claimed that management ignored their request for talks on payments for restricted stock units (RSUs). An RSU refers to stock-based employee compensation that is not fully transferable until certain conditions are met.
Last year, Hanwha Ocean promised to give its shipyard workers RSUs equivalent to 300 percent of their wages, but the company did not follow through earlier this year, after it failed to turn a profit in 2023.
Hanwha Ocean’s workers plan to continue protesting against management until it accepts their request.
On July 22, Samsung Heavy Industries’ labor council approved a strike.
If the labor disputes are prolonged, Korean shipbuilders will face difficulties in delivering vessels to their customers on time and lose the trust of global clients.
“A general strike will cause a delay in production amid the lingering labor shortage,” a shipbuilding industry official said.
Industry officials point out that delayed deliveries will require domestic shipbuilders to pay billions of won to their customers in compensation and will increase the chance of their Chinese competitors dominating the market.
