Daewoo Shipbuilding & Marine Engineering Union "Hanwha Side Guarantees Employment and Collective Agreement Succession"

"Acceptance of Requests... On-site Inspection to Be Allowed"

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Hanwha Group, currently conducting due diligence for the acquisition of Daewoo Shipbuilding & Marine Engineering (DSME), is reported to have promised the DSME labor union job security and the succession of union and collective bargaining agreements.

This is interpreted as a significant resolution of the labor union conflict issue, which had been identified as an obstacle to the acquisition of DSME.

On the 16th, the Metal Workers' Union DSME branch stated in a press release, "This morning, the representative of the Hanwha acquisition team visited the Geoje DSME branch and gave a final confirmation on 'guaranteeing participation of the parties involved,' 'job security,' and 'succession of union and collective bargaining agreements.' We decided to allow on-site due diligence under the judgment that it is most important to properly set the first step in labor-management relations with Hanwha."

They added, "We were able to confirm Hanwha's sincerity in proposing to form a working-level consultative body to discuss the remaining demands after the signing of the main contract. The union's decision to allow on-site due diligence will be an important turning point for the future and development of DSME," emphasizing the significance of the decision.

The union stated, "There have been several attempts to sell DSME under the Korea Development Bank over the past 21 years, all of which failed due to the government's and Korea Development Bank's sale policies that pushed for unilateral sales without participation of the parties involved. Going forward, the union will participate confidently in the main contract, immediately set up a negotiation table with Hanwha upon signing the main contract, and begin discussions on the remaining demands of the DSME branch," they added.

After the government and Korea Development Bank announced the sale of DSME in September, the DSME labor union prepared four major demands reflecting the opinions of stakeholders. These demands included ▲job security for all employees ▲succession of union and collective agreements ▲company development plans ▲regional development plans.

Subsequently, the union held unofficial meetings with Hanwha, but Hanwha reportedly stated, "Before the main contract is signed, there is no legal status, and due to a clause in the Memorandum of Understanding (MOU) prohibiting contact with the parties involved, it is difficult to establish a negotiation table with the branch."

On the 11th, during a protest in Seoul, the highest official of the acquisition committee visited the DSME branch and conveyed the intention that Hanwha should clarify its position on the union's demands before the on-site due diligence.

A union official said, "After the main contract is signed, we will prioritize the demands and reach agreements one by one. By the time the corporate merger is approved, we plan to finalize negotiations on the sale demands," he said.