Long Road to Normalization... Daewoo Shipbuilding & Marine Engineering 47 Billion Won Compensation Lawsuit and Subcontractor Union Hunger Strike

Daewoo Shipbuilding Files 47 Billion KRW Compensation Lawsuit Against Subcontractor Union Executives
Subcontractor Union Claims Company Failed to Honor Promise of Employment Security for Union Members of Closed Firms

Daewoo Shipbuilding & Marine Engineering Seoul Office / Photo by Moon Honam munonam@

[Asia Economy Reporter Choi Seoyoon] While the subcontractor union continues a hunger strike for the 10th day, claiming that Daewoo Shipbuilding & Marine Engineering (DSME) is not fulfilling the agreed terms promised after the strike ended, DSME has filed a lawsuit seeking 47 billion KRW in damages against them. Although DSME's management issued a public apology stating they would actively work to resolve the conflict, the labor-management dispute appears to be deepening.

According to industry sources on the 27th, DSME filed a lawsuit seeking 47 billion KRW in damages against the executive members of the subcontractor union of the Korea Metal Workers' Union Gyeongnam Branch Geoje-Tongyeong-Goseong Shipbuilding Subcontractor Chapter, citing massive damages caused by their occupation protest.

DSME claimed that monetary damages occurred due to ▲ unnecessary expenses on manpower and equipment mobilized for halted construction caused by the strike ▲ additional costs to recover the schedule and ensure timely delivery ▲ losses from delayed payments and delivery delays.

The amount claimed in the damages lawsuit may increase. DSME stated, "The construction projects affected by the strike are still ongoing," and "items for which it is difficult to specifically calculate damages were not included in this lawsuit amount."

They added, "At a later point when damage amounts can be calculated, considering the progress of the lawsuit, likelihood of winning, and possibility of recovering damages, we will review expanding or modifying the claims if necessary."

While DSME holds the subcontractor union responsible for the strike damages, the subcontractor union is on a hunger strike, claiming the company is not honoring the agreed 'employment succession.' At the time of the strike settlement, DSME subcontractor unions and 22 partner companies' councils promised employment succession for union members belonging to four companies that closed before and after the strike.

Kim Hyungsoo, head of the Geoje-Tongyeong-Goseong Shipbuilding Subcontractor Chapter, who has been on hunger strike in front of the National Assembly for 10 days, said, "After the strike ended and returning from summer vacation, when we discussed employment succession, the company is stalling with various excuses," adding, "They ask us to wait a little longer, but from the workers' perspective, earning one month's wage to live for one month, it is difficult to maintain livelihoods immediately."

Earlier, the DSME subcontractor union went on strike from June 2, demanding a 30% wage increase and collective bargaining. With no response from management, they began an occupation protest at DSME Okpo Shipyard 1 Dock (shipbuilding yard) in Geoje City, Gyeongnam, from June 22. The subcontractor union and management, who were negotiating, reached a dramatic settlement on the 51st day of the strike and 31st day of the occupation protest on the 22nd of last month, just before the two-week long summer vacation.

DSME management issued a public apology four days after the strike ended, stating, "We will do our utmost to normalize the company as soon as possible and regain public trust," and "We will take this incident as a lesson and lead fundamental improvements and create a new win-win cooperation model between primary and subcontractors."

On the 25th of last month, a worker was performing welding work at Daewoo Shipbuilding & Marine Engineering Okpo Shipyard in Aju-dong, Geoje-si, Gyeongnam. [Image source=Yonhap News]