News Room - Business/Economics

The unions of Korea’s shipbuilders announced Wednesday that they will launch a joint strike a week later on Sept. 9 over stalled wage negotiations, more headwinds for companies struggling with big losses and weak order books.

In a press briefing Wednesday, an alliance of shipbuilding unions established in February said it was calling a four-hour partial strike next week. The alliance includes the unions from eight of nine Korean shipbuilding companies, including the Big Three: Hyundai Heavy Industries (HHI), Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering (DSME). Also included in the eight are Hanjin Heavy Industries, Hyundai Mipo Dockyard and Sungdong Shipbuilding & Marine Engineering.

STX Offshore & Shipbuilding, which already wrapped up a deal on this year’s wage increases, will not be part of the protest.

The alliance said the strike will be staged at each of the eight companies’ plants.

“We will achieve a triumph together,” said Hong Ji-wook, head of the labor union alliance. “We will try to promote a corporate culture in which people who are accountable for mismanagement take all the responsibility they should.”

The unions accuse the companies’ managements for the losses and say the workers should not unduly suffer.

The alliance said the plan could be cancelled if wage negotiations reach an agreement.

“Each union has been in negotiations for more than four months, and each has a different situation,” Hong said.

The most aggressive union is at the country’s No.1 shipbuilder, HHI. It announced Monday that about 16,000 union members will launch a four-hour partial strike from 8 a.m. to noon on Friday, even before next week’s protest.

The union is demanding the company raise workers’ monthly base pay by 127,560 won ($108), a 6.77 percent rise from a year ago, and remove a performance-based salary system. The union also wants the company to guarantee workers’ jobs until retirement age regardless of performance. It said it will launch a seven-hour strike on Sept. 17 if its demands are not
accepted.

“We know that some people view our protests negatively since the industry is in a tough situation,” said Jeong Byung-mo, head of HHI’s labor union. “The company said it cannot raise salaries this year because it is in trouble. But there is no reason for workers to accept that because our financial hardship was brought about by leadership, meaning that the people who should take responsibility are those executives receiving much higher salaries. What we are asking from the company is to use the money it earned from 2003 to 2009, when the industry was booming, the money the company said in the past it would use if it fell into trouble in the future. The company and its two affiliates in the shipbuilding business have 18 trillion won in reserves total, but they keep saying we should tighten our belts.”

HHI posted an operating loss of 3.2 trillion won last year. Total losses in the second quarter reported by the big three - Hyundai, Samsung and DSME - was about 5 trillion won.

Hyundai Motor’s union has taken a step toward a strike as well. After declaring the collapse of negotiations with management on Aug. 27, the union said Wednesday it decided to launch a strike after union representatives held meetings on Monday and Tuesday in Ulsan and submitted an application for mediation to the National Labor Relation Commission Tuesday evening. The labor union, which has 47,000 members, is considering taking a vote during the 10 days of arbitration to ask members whether they support the strike.

If the members vote in favor, the union can legally strike after the arbitration period ends.

Labor and management at the nation’s leading automaker had 22 rounds of negotiations through Aug. 27 without reaching an agreement. The union wants the company to raise the monthly base pay by 159,900 won, a 7.84 percent rise from a year ago, and to pay 30 percent of the company’s net profit as bonuses to workers. It also wants management to guarantee jobs until retirement age for both regular and temporary workers. The union also wants the company to build more plants in Korea and extend the retirement age from 58 to 65. The company announced last month that it will extend the retirement age to 60 after adopting the peak wage system.

But the overall condition of the automaker is not good enough to accept all demands made by the union. The company’s operating profit in the first half of this year was only 3.3389 trillion won, a 17.1 percent drop from a year ago. Car sales dropped by 3 percent from a year ago in Korea as it sold 335,364 units in the first half. The figure for the export market dropped by 3.2 percent during the same period after it only sold 2.08 million units.