On August 28, major shipyards in South Korea, including HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries, held a joint strike that lasted from three to five hours. The South Korean industry is concerned that the strike could disrupt production and delay ship deliveries.
The HD Hyundai Heavy Industries Union held a three-hour strike on Aug. 28 from 2 to 5 p.m. The strike was originally planned to be attended by the union leadership, but in the end, all union members participated in the action. From 1:30 p.m. to 5 p.m., the HD Hyundai Samho union announced a strike.
Hanwha Ocean announced that it would hold a four-hour strike with full participation of all union members. HSG Sungdong Shipbuilding and K Shipbuilding planned to hold partial strikes. Samsung Heavy Industries would also hold a live protest. These shipyards in the joint strike all belong to the Federation of Korean Metal Workers’ Trade Unions (KOSUN).
The HD Hyundai Heavy Industries union said, “Four months have passed since the union made its demands, but the company has yet to give any response. We must show the power of resolute struggle to the company that has not even made a proposal.”
Since June 4 of this year, HD Hyundai Heavy Industries labor and management have held 18 negotiations. HD Hyundai Heavy Industries labor union has put forward a series of demands to the management such as raising the basic wage by 159,800 won (about $120, excluding salary increase), adjusting the calculation standard of performance bonus, extending the retirement age, adjusting the payment method of seniority allowance (10,000 won/about $7.5 for each additional year of service), and increasing the number of Korean laborers, but the management has not yet put forward any concrete proposals.
There is a high possibility that the labor dispute between the two sides will be prolonged due to the large differences between the two sides, and the inability to make substantive progress in the negotiations on wage increase, benefits and extension of retirement age.
Regarding the strike action on August 28, HD Hyundai Heavy Industries claimed that it did not cause any major disruption to the shipyard’s operations, but said, “The company regrets that the union has declared a strike at such an important and critical time, which will be a watershed moment in the company’s recovery of its business performance after years of recession. We hope to avoid further strikes and focus on negotiations to find a consensus.”
It is worth noting that the HD Hyundai Heavy Industries union has announced that it will hold continuing partial strikes on September 4th, 6th and 9th. KOSUN will also go on a further strike, scheduled for September 9, if negotiations do not progress by September.
For Samsung Heavy Industries, the company’s labor union acquired the right to strike on August 22, and the union has made demands for a basic wage increase of 162,000 won (about $121.03), an extension of the retirement age, an increase in seniority allowances and holiday repatriation fees, a new communication fee, and improved treatment for outsourcing companies. Again, no agreement has yet been reached between labor and management.
Hanwha Ocean has already staged a seven-hour strike in July this year, and the key sticking point between labor and management remains the use of restricted stock units (RSUs) for performance bonuses, but the issue has yet to be resolved.
The South Korean industry is concerned that if the strike escalates, shipyard’s production operations may be disrupted, which in turn will delay the ship delivery program. An industry analyst said, “If the strike continues for a long time, this year’s scheduled ship deliveries may be delayed, which may damage the reputation of Korean shipyards.”