"Undermining Management Autonomy... Will Protest if Pushed Forward"
Concerns Over Talent Drain, Organizational Instability, and Exclusion from Shipping Alliances
HMM has announced its opposition to President Lee Jaemyung's pledge to relocate HMM's headquarters to Busan, stating that such a move would seriously undermine the management autonomy of a private company. The company declared that it would launch a protest if the plan is pushed forward.
On June 4, the HMM land-based workers' union issued a statement, saying, "President Lee Jaemyung remarked during his campaign rally in Busan on June 1 that regarding the relocation of HMM's headquarters to Busan, 'We should persuade the workers and get their consent, but if they ultimately refuse, we just have to go ahead?what else can we do?'" The union strongly urged, "We call for an immediate end to this political violence, which gravely damages the autonomy and independence of a publicly listed company."
The union continued, "Relocation of a company's headquarters should be considered from the perspective of management efficiency and competitiveness," and pointed out, "Physically moving from Seoul, where major clients and financial institutions are concentrated, to Busan would negatively impact external collaboration efficiency and the speed of decision-making." The union also argued that forcing a private company to relocate simply because the government is the major shareholder constitutes an abuse of authority.
The union especially emphasized that many employees have established their lives in the Seoul metropolitan area, so a forced relocation of the headquarters could lead to a loss of personnel and organizational instability. As of the end of last year, about 90% of the 1,063 land-based employees (56% of the total workforce) were working in Seoul.
The union also expressed concerns that HMM could be excluded from global shipping alliances. "HMM has formed shipping alliances with global shipping companies to share routes, vessels, and operating schedules, and has been working to expand market share, diversify routes, increase transport efficiency, reduce costs, and expand sales and customer bases," the union stated. "If the headquarters relocation becomes a reality, the resulting organizational disruption and decline in international credibility could weaken our competitiveness when global shipping market alliances are reorganized."
Furthermore, the union argued that the push to relocate HMM's headquarters contradicts the direction of the Commercial Act amendment that the Lee Jaemyung administration is seeking to reintroduce. "We understand that the Commercial Act amendment is being pursued to reduce damage to minority shareholders and stakeholders caused by unilateral decisions of major shareholders," the union said. "To force the relocation of a private company simply because the government holds a large stake, and to do so without employee consent, is at odds with the Commercial Act amendment."
The union added, "Major decisions such as the relocation of the headquarters must be made through thorough review and by gathering the opinions of all members," and declared, "If the relocation is pushed forward hastily, we will respond with strong resistance."
Meanwhile, HMM is 71.69% owned by two government agencies: Korea Development Bank (36.02%) and Korea Ocean Business Corporation (35.67%). Although Korea Development Bank attempted to sell its stake several times and Harim Group was selected as the preferred bidder at the end of last year, negotiations ultimately fell through due to disagreements over price and lack of shipping expertise.
In this context, President Lee has pledged to make Busan a maritime powerhouse by relocating the Ministry of Oceans and Fisheries and HMM's headquarters, and by establishing a maritime court. Although government agencies hold a majority stake, employees of HMM, which is a private company, have expressed their bewilderment.
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