8 shipbuilders jointly went on strike, marking the official start of the “summer struggle” between labor and management in South Korea’s shipbuilding industry. Unions demanded wage increases citing sustained industry prosperity and rising corporate profits, while management refused to concede, emphasizing the peaking global ship market. As conflicts escalate, South Korea’s shipbuilding sector may face prolonged wage negotiation deadlock this year.
Collective wage agreement negotiations “stalled,” continuous strikes by major South Korean shipbuilders’ unions
On July 18, unions from 8 shipbuilders affiliated with the Korean Metal Workers’ Union Shipbuilding Division (KOSUN)—including HD Hyundai Heavy Industries, HD Hyundai Samho, Hanwha Ocean, Samsung Heavy Industries, and K Shipbuilding—held a joint strike lasting over 4 hours. Meanwhile, HD Hyundai Mipo’s union members protested at the company’s Seoul headquarters.
KOSUN comprises unions from major shipyards such as HD Hyundai Heavy Industries, Samsung Heavy Industries, Hanwha Ocean, HD Hyundai Samho, HD Hyundai Mipo, HJ Shipbuilding, K Shipbuilding, and HSG Sungdong Shipbuilding. A KOSUN representative stated, “The strike will be led by unions with secured dispute rights.”
Previously, KOSUN demanded joint participation in this year’s collective wage agreement negotiations, warning that if management failed to present a satisfactory proposal by July 17, a joint strike would commence on the 18th.
Among the striking shipbuilders, HD Hyundai Heavy Industries’ union—the largest in employee numbers—opposed management most vehemently. The union held a 4-hour partial strike on July 16, followed by a 7-hour strike (9 AM to 5 PM) on the 17th. After joining KOSUN’s joint strike on the 18th, the union plans additional 7-hour strikes on the 22nd, 23rd, and 25th, with all members (excluding night-shift special vessel workers and subcontractors) participating.
Additionally, HD Hyundai Heavy Industries’ union protested at HD Hyundai Group’s Global R&D Center (GRC) in Seongnam, Gyeonggi-do. Union leader Baek Ho-seon began a hunger strike outside the center on July 9. The union stated, “The company’s proposal is even worse than 2008-2011 levels, mocking all members,” stressing that “HD Hyundai must sincerely address the demands of KOSUN and its three subsidiaries’ workers.”
Industry insiders attribute this year’s intensified wage disputes to divergent views on the shipbuilding market’s outlook. Unions argue that with vessel replacement cycles underway and years of workload secured, shipbuilders are enjoying soaring profits, warranting significant base wage hikes.
In Q1 2024, HD Korea Shipbuilding & Offshore Engineering posted operating profits of KRW 859.2 billion (~$598 million), up 436.3% YoY; Hanwha Ocean recorded KRW 258.6 billion (~$179 million), up 488.8% YoY; Samsung Heavy Industries reported KRW 123.1 billion (~$85.67 million), up 58% YoY.
Conversely, management fears the global shipbuilding boom is ending, potentially leading to another downturn. They argue that with new orders plummeting and replacement demand tapering, meeting union demands is untenable.
Clarksons data shows H1 2024 new orders totaled 647 vessels (46.8 million DWT, 19.4 million CGT), down 48% YoY in CGT terms. South Korean shipbuilders secured 113 orders (14.15 million DWT, 4.87 million CGT), down 7% YoY. Concerns loom that once current backlogs deplete, another slump may follow.
Unions: “Demand higher base wages” VS Shipyards: “Only floating wages possible”
Since May, major South Korean shipbuilders’ labor and management have negotiated collective wage agreements but remain deadlocked on key issues.
For instance, HD Hyundai Heavy Industries held 12 rounds of talks without progress. Management’s July 9 proposal was rejected as “below expectations.” Their offer included: KRW 127,000 (~¥660) monthly base wage hike (including seniority raises), KRW 5 million (~¥26,000) annual bonus, and performance-linked floating wages. Management claimed total floating wages could average KRW 20 million (~¥100,000) per worker with incentives.
Unions insist on prioritizing base wages, demanding: KRW 141,300 (~¥732) monthly hike (excluding seniority), seniority raises, retirement age extended to 65, new hires, and reduced subcontracting. HD Hyundai Heavy Industries’ union criticized management for lacking “respect for members who drove record profits and upheld global leadership.”
With negotiations likely protracted, KOSUN designated the Korea Shipbuilding & Offshore Equipment Association (KOSHIPA) as employer representative and requested arbitration. However, KOSHIPA maintains that individual companies should negotiate independently, stating it “monitors but won’t arbitrate.”
Annual strikes and clashes over wage talks have become routine in South Korea’s shipbuilding industry. Last year, KOSUN held mass rallies and partial strikes from July 28 to August 9 in Ulsan, Geoje, and elsewhere, threatening an October general strike.
On August 28, 2023, HD Hyundai Heavy Industries’ union launched its first annual strike, followed by partial strikes from October 18, including 7-hour actions on October 22-25 and 29-31. On October 30, clashes between striking workers and security over tent setups injured dozens, with security even overpowering police.
Additionally, on July 3, Hanwha Ocean’s union intercepted a vehicle believed to carry Hanwha Group Vice Chairman Kim Dong-kwan to deliver a petition, resulting in injuries to over 20 during scuffles with management.
