Against the backdrop of a full recovery in the shipbuilding industry, South Korea’s largest shipbuilding company HD Hyundai Heavy Industries is facing increasingly fierce labor-capital conflicts. The strike organized by the labor union has gradually escalated into violent clashes with bloodshed at the strike site, further intensifying the conflict between labor and capital.
On October 30, security guards at HD Hyundai Heavy Industries Ulsan Shipyard clashed with union members over the installation of tents. The union was trying to set up 10 tents on the main logistics channel of the shipyard, but the security guards intervened, leading to a heated confrontation. During the incident, about 10 people from both sides were injured and were taken to nearby hospitals by ambulances.
More than 30 people are being investigated by the police due to the violent clashes at the scene. HD Hyundai Heavy Industries has filed charges against more than 20 union managers and workers with the police for special injuries, property damage and illegal trespassing. The union has accused more than 10 company employees (including security guards) of attacking union members and causing harm.
HD Hyundai Heavy Industries said that the union was attempting to illegally occupy the main logistics road near the Ulsan Shipyard’s Pier 4 by setting up tents. Since hundreds of vehicles enter and leave the factory every day to transport equipment and materials from external suppliers, if the road is occupied, logistics will be blocked and the shipyard will be at risk of stopping operations, so the company tried to prevent the illegal occupation of the road.
HD Hyundai Heavy Industries said that the union was attempting to illegally occupy the main logistics artery near Pier 4 of the Ulsan Shipyard by setting up tents. Since hundreds of vehicles enter and exit the plant daily to transport equipment and materials from external suppliers, if the road is occupied, logistics will be disrupted, and there is a risk of the shipyard ceasing operations, so the company is trying to prevent illegal occupancy of the road.
According to Korean media reports, injuries suffered by both sides in the violent strike included being stabbed by sharp awls, broken noses, broken fingers, and broken ribs.
On November 5, about 1,000 union members held a rally in front of the main gate of Hyundai Heavy Industries in Ulsan to protest “security guards indiscriminately beating union members who were legally active” and demanded “the immediate dismissal of HD Hyundai Heavy Industries’ security team.”
As the conflict intensifies, labor-capital negotiations are expected to face more difficulties. Since the last meeting on June 4, HD Hyundai Heavy Industries’ labor-capital parties have held 29 rounds of negotiations, but have failed to reach an agreement. As the negotiations reached a deadlock, the union began to hold partial strikes on August 28, and had held 23 strikes as of November 5. This week, the union announced that it would further hold partial strikes of 7 hours a day from November 5 to 8.
In contrast, the other two Korean shipbuilding giants, Hanwha Ocean and Samsung Heavy Industries, have successfully reached a labor-capital agreement with the union this year.
Hanwha Ocean announced on October 13 that it had successfully reached a labor-capital agreement with the union. The agreement mainly includes raising the basic salary by 117,000 won and paying a one-time bonus of 3.7 million won.
Samsung Heavy Industries reached a labor-capital agreement earlier in September, and the union accepted the proposal to increase the basic salary by 115,000 won and a one-time bonus of 3 million won.
The labor-management agreement has eliminated the risk of strikes at Hanwha Ocean and Samsung Heavy Industries, allowing them to resume production in a stable manner. However, HD Hyundai Heavy Industries, which has received the largest number of orders, has been unable to reach a labor-capital agreement, which will undoubtedly have a significant impact on the normal production.
As the shipbuilding market improves, HD Hyundai Heavy Industries’ labor union demands increased benefits, including raising the basic salary by 159,800 won (about 816 yuan), changing the performance bonus calculation standard, and extending the retirement age.
In response, HD Hyundai Heavy Industries agreed to increase the basic salary by 125,000 won, issue 4 million won incentive bonuses and 300,000 won gift certificates, as well as new non-catastrophic accident performance bonuses in its second proposal (the first proposal was rejected), but was rejected by the union.
South Korean media are concerned that the protracted labor dispute at HD Hyundai Heavy Industries will not only cause the company to lose potential orders, but also affect shipbuilding reliability, which is considered the key to maintaining the competitiveness of South Korea’s shipbuilding industry.
South Korean industry warned that if the risk of strikes continues, HD Hyundai’s competitiveness in winning orders may be weakened. With less price advantage than Chinese shipyards, the company’s reputation in delivering ships on schedule will also be affected.
Due to strong demand from shipowners, HD Hyundai’s shipyards have received 169 new ship orders this year, valued at $18.84 billion, far exceeding the annual order target of $13.5 billion. According to a Korean industry insider, “If the strike continues until the end of the year, large-scale delivery delays at HD Hyundai will be inevitable. The loss of reliability will lead to a decline in the competitiveness of the Korean shipbuilding industry.”