Due to the improving shipbuilding market, most of the shipyards in the three largest shipbuilding groups in South Korea have welcomed a pay raise in 2023.
Hyundai Samho Heavy Industries(HSHI), a subsidiary of HD Hyundai, South Korea’s largest shipbuilding conglomerate, directly employed 3,869 employees last year, whose average annual salary reached 103.97 million won, or about $78,000 at the current exchange rate, an increase of 23 percent over 2022, according to a recent report by the Korean media.
This is said to be due to the fact that HSHI has been receiving hot orders for high-end vessels, and therefore the payout of employees’ performance bonuses has increased. According to the data of Imarine Order Bank, most of the new vessel orders taken by HSHI in 2023 are for high value-added ship types such as LNG carriers, VLGC/VLAC, and methanol-powered container ships.
Hyundai Heavy Industries Ulsan Shipyard, which is also under HD Hyundai, has an annual salary per capita of $68,000 in 2023, a 7% increase compared to 2022. Hyundai Mipo Dockyard (HD HMD), another shipyard under HD Hyundai, did not fare as well, with its annual salary per capita dropping by 2% to $63,000 from $64,000 in 2022, a 2% drop.
Samsung Heavy Industries, one of South Korea’s three largest shipbuilding giants, managed to turn a profit last year, with the average annual salary of its employees growing from $63,000 in 2022 to $66,000 in 2023, an increase of 5 percent.
Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering) had promised to improve the shipyard’s treatment. According to actual data, the average annual salary of Hanwha Marine employees increased by 14%, from $55,000 in 2022 to $62,000 in 2023.
In terms of corporate executives (executives of non-listed companies), only Hyundai Samho Heavy Industries and Samsung Heavy Industries saw an increase in executive compensation.
In 2023, the average compensation of Hyundai Samho Heavy Industries executives is $248,000, a 30% increase over 2022. On the other hand, the compensation of Samsung Heavy Industries executives increased to $181,000 from $166,000 in 2022, an increase of 9%.
On the other hand, the average compensation of executives at Hyundai Mipo Shipbuilding decreased by 23% from $221,000 to $17.0 million. On the other hand, the average compensation of executives at Hyundai Heavy Industries Ulsan Shipyard decreased from $248,000 to $238,000, down 4%.
From the above data, we can see that most of the shipyards under the three major shipbuilding groups in South Korea have increased their salaries benefiting from the improvement in the ship market. However, salary increases are often limited to directly employed employees, and subcontracted workers (outsourced workers) and even face the situation of being owed wages.
According to South Korea’s Daily Labor News, Ministry of Employment and Labor (MOEL) and Ministry of Social Affairs of Korea have confirmed that the relevant authorities have begun investigating the wage arrears of workers subcontracted by Samsung Heavy Industries.
subcontracting companies told the media that at present, workers at about 52 of Samsung Heavy Industries’ 83 internal subcontracting companies are owed wages, and the total amount of arrears is estimated to be as high as 7 billion won (about US$5.32 million).
The Korean media analyzed that Samsung Heavy Industries, which is on the dominant side, suppressed the amount of outsourcing contract and paid the outsourcing payment in installments are the reasons why the subcontracting companies could not pay the wages of the outsourced workers in time.