Korean Unions Plan Unified December Strike at Hyundai’s Shipyards
Unions represented workers at the Hyundai shipyards that make up the Korea Shipbuilding & Offshore Engineering Company detailed plans for strikes beginning in December in a long-running dispute over wages and working conditions. If the strikes proceed as planned, it would be the first time the unions for the three shipyards would have coordinated their action into a single companywide strike.
Unions represented the workers at the Hyundai Heavy Industries shipyard, Samho Heavy Industries, and Mipo Dockyard, coordinated a strike vote in late October. The unions confirmed an overwhelming authorization for a strike by the members. The unions for HHI and Samho have already secured approval from the local authorities for a strike but the regional labor office is yet to approve a strike for the Mipo Dockyard which is located in Ulsan.
“We have no choice but to fight to correct the distorted wage structure system, including low wages and long working hours, and recover a wage cut made during an industry recession,” said a representative for the labor unions.
Union officials said that they met with the company 22 times between July and October but had not received a formal proposal. HD Hyundai rejected the union demands saying it would cost the company more than $175 million per year according to reports by Business Korea. The unions are asking for base pay increases that would equate to a minimum of $99 as well as a 250 percent guaranteed bonus, increased dental benefits, and changes to the structure of the pay scale system.
The unions are saying unless management comes forward with meaningful proposals in the next two weeks, they would proceed with the plans for a strike. According to the schedule they released, there would be an initial four-hour work stoppage on December 6, followed by an additional action on December 7.
The following week, starting on December 13, they are threatening a full work stoppage. It would include all the yards making up the operations of South Korea’s largest shipbuilder.
The shipyards are under pressure to improve their efficiency and production to keep up with delivery schedules. Hyundai has built a large order backlog over the past two years. At the end of the third quarter, the company reported it has added in 2022 a further $22.15 billion worth of orders for 186 vessels, exceeding this year’s full-year target of $17.44 billion in new orders. While they continue to receive new orders, the shipyard’s financial performance has been under pressure due to rising costs. After several quarters of financial losses from the shipyard, Hyundai reported a profit of just over $200 million for the group during the third quarter.
In June and July, contract workers at Daewoo Shipbuilding & Marine Engineering mounted a strike that lasted 51 days including a sit-in on three tankers under construction. They were striking over pay and working conditions. The strike further weakened the financial condition of the shipyard leading to the decision by the Korea Development Bank to move forward with the privatization of DSME. The sale to the Hanwa Group is currently pending and scheduled to close in early 2023.
South Korea’s new president Yoon Suk-yeol called the strike at DSME “unacceptable.” He ordered ministers to take steps to bring it to a close, but the government did not directly intervene. It is unclear how the government would respond if a strike stopped production at Hyundai’s three shipyards.