Government Says, "If Shipbuilding Suffers, the People Suffer"; Six Unions Threaten Joint Strike

[Financial News]  
Mun Sin-hak, vice minister of the Ministry of Trade and Industry, made the remark at a ceremony marking Shipbuilding and Offshore Day on the 10th, describing it as "a conviction I have developed while overseeing industrial policy for more than 30 years." He was expressing appreciation for the shipbuilding industry, which, along with the automobile industry, has supported job creation in South Korea. The remark also served as encouragement as global demand for commercial vessels and warships surges. Yet the shipbuilding industry is being hampered by labor union actions. Unions have even warned that they will launch a joint strike at six companies unless satisfactory proposals are presented before Chuseok.
According to the shipbuilding industry on the 14th, the sector’s largest player, HD Hyundai Heavy Industries, has been hit by a series of partial strikes. Dissatisfied with management’s third proposal, the union carried out a four-hour strike by all members on the 11th, moving it up four days from the originally scheduled date of the 15th. The strike decision was made on the 10th, the same day HD Hyundai Heavy Industries announced that it would invest 1 trillion won in power-generation engines and small modular reactors (SMRs) to develop future growth engines.
In the era of artificial intelligence, electricity demand is surging as semiconductor mass production and data centers expand. This is why HD Hyundai Heavy Industries decided to invest 1 trillion won in expanding production facilities for power-generation engines and SMR primary equipment. The company is seeking new growth opportunities by making full use of its ship-engine technology.
Around the same time, the Korean Metal Workers’ Union (KMWU) Hyundai Heavy Industries branch escalated its struggle, demanding that management provide immediate benefits to workers. Citing projections that this year’s operating profit will double from last year, the union is demanding that 30% of the profit be redirected to workers through higher base pay, performance bonuses and incentive payments. It has not backed down even though the Ministry of Employment and Labor issued guidelines stating that so-called “n% performance bonuses” are not subject to mandatory bargaining.
The situation is more serious at Hanwha Ocean. The KMWU Hanwha Ocean branch was continuing its general strike for the 12th consecutive day as of that day. It has alternated between partial and full-scale strikes, excluding weekends. Samsung Heavy Industries has not yet gone on strike, but its union staged a protest campaign in Seoul, visiting Samsung Electronics’ Seocho headquarters and Chairman Lee Jae-yong’s home.
The unions also joined forces to set a “deadline.” The Shipbuilding Industry Labor Union Alliance, made up of eight shipbuilding sites, warned on the 11th that it would launch a “joint strike” unless agreements were reached before the Chuseok holiday. Applications for mediation and industrial action were approved at six sites: Hyundai Heavy Industries, HD Hyundai Mipo, Hanwha Ocean, Samsung Heavy Industries, HSG Sungdong Shipbuilding and K Shipbuilding. The Shipbuilding Labor Union Alliance noted, "It has been five months since negotiations began, but not a single site has reached an agreement, and Samsung Heavy Industries, Hyundai Samho Heavy Industries and K Shipbuilding have not submitted a single proposal." It added, "After Chuseok, we will launch an all-out struggle, including a joint strike."
The shipbuilding industry believes the impact of the strikes remains limited for now because production processes are separated. However, disruptions will be unavoidable if a joint strike blocks logistics within the plants. In other words, demand is rising and the tide is coming in, but the industry may be unable to row because of the strikes. Delays in preparing future growth engines, as seen at HD Hyundai Heavy Industries, would be another consequence. 
[email protected] Kim Yun-ho Reporter