Union risk is looming large again in the Korean shipbuilding industry, as the unionists at the three affiliates of Hyundai Heavy Industries Group are each holding a strike vote. The three affiliates are Hyundai Heavy Industries, Hyundai Mipo Shipbuilding and Samho Heavy Industries.
At Daewoo Shipbuilding & Marine Engineering (DSME), which is to be sold off to Hanwha Group, the labor union is showing a strong will to intervene in the management of the company, suggesting a rough road ahead for Hanwha’s acquisition of the troubled shipbuilder.
The labor unions of the three HHI Group affiliates began voting on a strike for all union members at 6:30 a.m. on Oct. 24. Their votes will be cast until 6:30 p.m. on Oct. 26.
The labor and management of the three shipbuilders have negotiated 22 times so far, starting with an ice-breaking meeting for collective bargaining negotiations in July. However, an agreement has not yet been reached.
The labor unions asked the management for the proposal several times. But when the management rejected it, on Oct. 14, it applied for industrial dispute mediation with the Central Labor Relations Committee. Accordingly, on Oct. 21, the committee decided to suspend the mediation, giving the labor unions the legal right to go on strike.
The labor unions demanded a base salary increase of 142,300 won (excluding salary increase according to service years), the guarantee of a 250-plus percent performance-based bonus, the abolition of the wage peak system, and one million won in annual dental prosthetic expenses for each of unionists. The management said it could not accept the demands, saying “If we accept all the union’s demands, it will incur additional costs of about 250 billion won per year. Therefore, we cannot agree to them.”
Considering previous cases, it seems highly likely that union members’ votes will turn out in favor of going on strike. However, even if the result of the votes comes out in favor of downing tools, the labor unions will not go on strike immediately, analysts forecast. Currently, the Korean shipbuilding industry is flooded with work but is facing a shortage of labor. Thus, if the labor unions go on an actual strike, it will result in considerable impacts.
Like the three shipbuilders of Hyundai Heavy Industries, DSME is said to have labor union risk as a potential negative factor. Unionists of DSME which has been acquired by Hanwha Group are still raising their voices, saying that they should be allowed to take part in the takeover process.
DSME’s labor union demands four conditions – job security, succession to collective agreements signed in the past, the growth of DSME and regional development. DSME unionists warned that if this condition is not accepted by the management, it will launch a hard-line physical movement to take issue with the sale of DSME by uniting with unionists at eight shipyards for solidarity in the shipbuilding industry including Hyundai Heavy Industries, and 180,000 members of the Korea Metal Workers Union.
Source: Business Korea
