[Exclusive] HMM Proposes First Wage Increase Rate Around 8% to Management Side

HMM has entered the labor dispute mediation process at the Central Labor Relations Commission regarding this year's wage and collective bargaining negotiations, and it has been confirmed that the company proposed a wage increase of around 8% for the first time. However, there is still a significant gap compared to the 25% increase proposed by the union, so it is expected to take considerable time for both sides to narrow their differences.

According to the Korea Development Bank and the shipping industry on the 18th, HMM proposed a plan to increase wages by up to about 8% during the second mediation meeting with the Land Labor Union (Office Workers Union) held on the 13th. Even when including additional amounts such as welfare points beyond the salary, the total wage increase scale does not exceed double digits.

A senior HMM official said, "We proposed a plan centered on increasing the existing salary by about 8% and expanding benefits such as welfare points," adding, "However, no agreement was reached between labor and management at the Central Labor Relations Commission meeting, and additional negotiation proposals have been requested."

If the wage increase rate proposed by the company is applied to last year's average salary of HMM workers (62.46 million KRW), the increase per person is estimated at 4.9968 million KRW, raising the average salary to 67.45 million KRW. In this case, the total wage increase amount for 1,519 HMM land and sea workers would be approximately 7.59 billion KRW, which is about 6.3% of the additional labor cost (120 billion KRW) the company would have to bear if it accepted all of the union's proposals.

Regarding this, the union stated that although the company raised the wage increase rate by about 2.5 percentage points from the original proposal (5.5% wage increase), this is still difficult to accept as it does not reach the average wage of domestic mid-sized shipping companies. In fact, the average wages of domestic shipping companies Pan Ocean and Daehan Shipping are about 87 million KRW and 71 million KRW respectively, which are up to 20 million KRW higher than HMM.

The company is conducting final negotiations through the first and second mediation meetings with the Maritime Labor Union at the Central Labor Relations Commission on the 18th and 20th, and is scheduled for the third mediation meeting with the Land Labor Union on the 19th, but it is unclear whether labor and management will reach an agreement. If the gap in positions is not narrowed during the mediation meetings, both unions plan to proceed with a vote on whether to engage in labor dispute actions.

Earlier, the HMM Land and Maritime Labor Unions proposed a wage increase rate of about 25% as a plan to normalize wages that had been frozen for the past eight years through collective bargaining, buoyed by this year's record-high performance. However, creditors such as the Korea Development Bank and the company maintain that more focus should be placed on strengthening fundamentals for the reconstruction of the shipping industry. HMM recorded sales of 2.9067 trillion KRW and an operating profit of 1.3889 trillion KRW in the second quarter of this year, surpassing the previous record operating profit of 1.0193 trillion KRW in the first quarter.

An HMM official said, "Although the Land Labor Union rejected this wage increase proposal at the second mediation meeting of the Central Labor Relations Commission, we will try to narrow the differences through the remaining mediation meetings."