[Shipbuilding Labor Shortage Crisis] "No Workers, Risk of Losing Orders... Yeongam and Geoje May Sway"

[Report] Visiting Daebul Industrial Complex Where Partners Gather at Hyundai Samho Heavy Industries Shipyard in Yeongam, Jeonnam

Eco-friendly Ship Market Booms
Hyundai Samho Heavy Industries Secures 15 Orders This Year Alone

Partners Face Emergency Due to Labor Shortage
Partner Representative: "Welders' Daily Wages Have Soared in the Past Two to Three Months
Labor Costs Skyrocket Due to Lack of Workers"

"If Domestic Shipbuilding Loses Competitiveness,
Orders Will Shift to China and Southeast Asia"

On the 22nd, eco-friendly ships including LNG-powered vessels under construction are lined up at Hyundai Samho Heavy Industries shipyard in Yeongam-gun, Jeollanam-do.

On the 23rd, at the Hyundai Samho Heavy Industries shipyard located in Yeongam, Jeollanam-do, massive ship blocks and liquefied natural gas (LNG) tank sections filled the approximately 2.31 million square meters (about 700,000 pyeong) shipyard. The block pieces were being transported on carriers, moving across the vast shipyard. At the docks (shipbuilding spaces) and quays (structures built to moor ships to the shore), eco-friendly vessels equipped with LNG carrier and propulsion systems and scrubbers (desulfurization devices) were lined up. It resembled a showroom for future and eco-friendly ships.

The shipbuilding industry, having escaped the 'order cliff,' is now suffering from a 'labor cliff.' During the shipbuilding boom in the early 2010s, most skilled technicians such as welders, pipefitters, and painters in areas like Yeongam, Geoje, and Ulsan left the shipyards. The younger generation turned their backs, considering it a declining industry, and foreigners have been unable to enter the country due to COVID-19. After a long recession, there is 'water coming in but no one to row the boat.' The shortage of workers has driven labor costs sky-high, increasing the burden on shipbuilders.

◆ The Sea in Front of Yeongam Turned into a 'Showroom' for Eco-Friendly Ships

Hyundai Samho Heavy Industries Shipyard, known as a cradle for eco-friendly ships, recently became the first in the world to build large tankers, container ships, and bulk carriers equipped with LNG propulsion systems, which are currently receiving a flood of orders. Shipbuilders like Samho Heavy Industries, whose competitiveness lies in excellent technology, require advanced skills.

However, becoming a skilled worker takes a lot of time and cost. For shipyards like Samho Heavy Industries, which specialize in land-based construction methods, expanding shipyard construction personnel is an especially urgent matter.

This year, including shipbuilders and subcontractors, it is estimated that up to 8,000 workers will be needed in production fields. Quarterly, the shortages are 3,649 in Q1, 5,828 in Q2, 8,280 in Q3, and 7,513 in Q4.

A representative of a subcontractor expressed concern, saying, "If the shipbuilding industry loses competitiveness due to labor shortages, order volumes will shift to China or Southeast Asia," adding, "Yeongam and Geoje could become like the Rust Belt in the U.S." The Rust Belt refers to regions such as Ohio and Pennsylvania, once manufacturing hubs, that faced decline due to industrial downturns.

Hwang Ju-seok, CEO of Daea Industry, a shipbuilding subcontractor located in the Daebul Industrial Complex in Yeongam-gun, Jeollanam-do, revealed, "The daily wage for welders has risen from 110,000 won ten years ago to 180,000 won now," adding, "Since the end of last year, when the order march continued, wages jumped by 30,000 won in just two to three months, but finding workers remains difficult."

On the 22nd, a trainee is practicing welding on a liquefied natural gas (LNG) tank at the Technical Training Center within Hyundai Samho Heavy Industries in Yeongam-gun, Jeollanam-do.

Industry Faces 'Existential Crisis' Amid Record-Breaking Order Surge

Not only Hyundai Samho Heavy Industries but also large shipbuilders and their subcontractors are widely concerned that the industrial ecosystem could collapse due to labor shortages. The shipbuilding process is like 'stacking blocks.'

Various blocks are welded and joined to form the shape of the ship. After making steel plates into blocks, loading them, and completing painting and piping work, the ship can be launched into the sea. If subcontractors responsible for block manufacturing cannot perform these roles due to labor shortages and rising labor costs, shipbuilders may fail to meet order deadlines or may have to reject orders.

Kim Tak, Executive Director of the Jeonnam Shipbuilding and Marine Equipment Cooperative, said, "Since 5 to 6 years ago, as work declined, skilled workers in the region moved to other industries such as construction and semiconductors," adding, "Because shipbuilding labor is intensive and wages in other industries are not bad, a vicious cycle has developed where workers do not return to shipbuilding."

There are calls for government and local authorities to implement manufacturing revival strategies, such as expanding foreign worker quotas and improving residential conditions near shipyards. Kim Young-hoon, professor of Shipbuilding and Marine Systems Engineering at Gyeongnam National University, advised, "Shipbuilding involves many overtime hours, and the implementation of the 52-hour workweek has exacerbated labor shortages," adding, "Temporarily or flexibly exempting shipbuilding from the 52-hour rule or providing incentives such as improved living conditions is necessary."

On the 22nd, a ship is being constructed using Samho Heavy Industries' unique land-based construction method at the Hyundai Samho Heavy Industries shipyard in Yeongam-gun, Jeollanam-do.