Hyundai Heavy Industries Union of 3 Companies, First-Ever Strike or Settlement... This Week's Turning Point

'Securing the Right to Strike' Hyundai Heavy Industries and 3 Shipbuilding Union
Focused Negotiations with Management Begin from This Week
'Turning a Profit' Shipbuilding Sector at a Crossroads Over Potential Work Stoppage

The Hyundai Heavy Industries labor union has been on strike at the Ulsan headquarters since April 27 due to difficulties in wage negotiations. [Image source=Yonhap News]

The Hyundai Heavy Industries Group shipbuilding three companies (Hyundai Heavy Industries, Hyundai Samho Heavy Industries, Hyundai Mipo Dockyard) labor unions and management have entered into intensive five-day weekly negotiations.

According to Hyundai Heavy Industries on the 10th, the labor and management parties have started intensive five-day weekly negotiations by holding talks on Tuesday and Thursday, as well as working-level negotiations on Monday, Wednesday, and Friday starting this week. This marks a new breakthrough in wage and collective bargaining negotiations at a time when the Hyundai Heavy Industries union has been holding sequential strike countermeasure committee (strike committee) launch ceremonies since the 3rd and preparing to go on strike.

Previously, the labor unions of the three shipbuilding companies passed strike approval votes last month with majority support: Hyundai Heavy Industries (63.1%), Hyundai Samho Heavy Industries (73.7%), and Hyundai Mipo Dockyard (71.9%), making legal strikes possible. The unions plan to carry out executive-centered protests in Seoul, simultaneous and rotating strikes among the three unions if negotiations do not proceed smoothly, aiming to settle this year's wage and collective bargaining agreements. The unions are demanding ▲a basic wage increase of 142,300 KRW (separate from seniority increments) ▲guarantee of 250%+α performance bonuses ▲abolition of the wage peak system ▲job security. If a strike materializes, it will be the first case of simultaneous strikes by these three companies.

Hyundai Heavy Industries' shipbuilding division, which has consecutively secured orders for eco-friendly vessels such as LNG (liquefied natural gas) carriers and propulsion ships, is the only shipbuilding company to have turned a profit in an industry still struggling with deficits. The holding company for the shipbuilding division, Korea Shipbuilding & Offshore Engineering, announced consolidated sales of 4.2644 trillion KRW and operating profit of 188.8 billion KRW for the third quarter of this year. This represents a 19.9% increase in sales and a 33.2% increase in operating profit compared to the third quarter of last year.

In particular, it achieved operating profit for the first time this year, marking an 'escape from deficit.' Korea Shipbuilding & Offshore Engineering explained that this result reflects improvements in the ship portfolio, cost reduction, and process efficiency efforts. With a significant increase in orders and the continuation of a high exchange rate market, it is expected that Korea Shipbuilding & Offshore Engineering's future performance will continue to improve.

However, concerns about work stoppages due to strikes are looming again over the shipbuilding industry, which is emerging from a long recession tunnel. Since labor and management are holding intensive negotiations and launching the strike committee simultaneously, this week is expected to be a turning point for strikes and the settlement of wage and collective bargaining agreements.

As labor and management enter intensive negotiations, some degree of consensus is expected in future talks, but the union is fully prepared to go on strike immediately if there is no progress in negotiations. A union official emphasized, "The choice between strike action and negotiations is up to the company," adding, "A satisfactory proposal must be presented in this negotiation."