Labor Unrest Deepens in Shipbuilding Industry... HD Hyundai Heavy Industries Faces Risk of Full-Scale Strike for Second Consecutive Year

[Financial News] Chuseok labor unrest is intensifying in the shipbuilding industry as semiconductor companies share their operating profits with employees. HD Hyundai Heavy Industries is facing the possibility of a full-scale strike for the second consecutive year, while Hanwha Ocean has been on strike for 17 days. Samsung Heavy Industries has not yet gone on strike, but its workers have secured the right to strike.
According to the shipbuilding industry on the 16th, labor unions at major shipbuilders are escalating their actions. The Shipbuilding Industry Labor Union Alliance has warned of joint strikes, demanding that labor disputes be settled before Chuseok. Concerns are growing that HD Hyundai Heavy Industries, the industry leader, could launch a full-scale strike for the second consecutive year.
The Hyundai Heavy Industries Branch of the Korean Metal Workers’ Union launched a four-hour partial strike involving all union members on the 11th, four days earlier than previously announced. It staged another four-hour strike on the 14th and 15th, and will carry out seven-hour strikes from that day through the 18th.
Although all union members are subject to the partial strikes, most are reportedly not actually participating. HD Hyundai Heavy Industries explained that the separate structure of the production processes means the strikes have no substantial impact on operations. The same applies to Hanwha Ocean, which has alternated between partial and general strikes for 17 days, excluding weekends, as of that day.
The main concern is a full-scale strike. If the disruption extends to logistics between production processes, operations could be affected. If the Shipbuilding Industry Labor Union Alliance fails to reach a settlement before Chuseok, the six shipbuilding companies’ labor unions could launch full-scale strikes after the holiday, using a joint strike as the catalyst.
In that case, HD Hyundai Heavy Industries would record full-scale strikes for two consecutive years, following last year’s strike. Hanwha Ocean could face concerns that the dispute may escalate to the level of the 2022 strike, when subcontractor union members occupied docks under its predecessor, Daewoo Shipbuilding & Marine Engineering. There is also speculation that the Samsung Heavy Industries Workers’ Council, which has not yet gone on strike, could take action unexpectedly. It secured the right to strike in July.
If strikes disrupt operations to the point that work becomes difficult, the order backlog of the three major shipbuilders, worth about 200 trillion won, could be affected. Their order schedules are packed, so even a brief halt could cause significant damage.
HD Hyundai Heavy Industries and Hanwha Ocean are holding main and working-level negotiations every day in an effort to narrow their differences. Once a tentative agreement is reached, it will be finalized as the companies’ final offer, after which the unions will hold a vote.
The stated justification for the intensifying Chuseok labor unrest is profit sharing, but the actual issue is reportedly an increase in base wages. That is because profit sharing ultimately takes the form of a base-wage increase. The unions maintain that, as operating profits are expected to improve by up to twofold this year amid the recovery in the shipbuilding industry, base wages should be raised by the full amount they have demanded.
Both the Hyundai Heavy Industries Branch of the Korean Metal Workers’ Union and the Hanwha Ocean Labor Union Branch demanded a 149,600-won increase in base wages. HD Hyundai Heavy Industries and Hanwha Ocean offered increases of 110,000 won and 95,000 won, respectively. The Samsung Heavy Industries Workers’ Council demanded a 9.3% increase in base wages.
[email protected] Kim Yoon-ho, Jung Won-il Reporter