hankyoreh

Members of the Korean Metal Workers Union chant slogans during a press conference near the Blue House in Seoul’s Jongno district

As South Korea’s three largest shipbuilders launch restructuring efforts that will involve spinning off business divisions and reducing the workforce, conflict is intensifying between labor and management.

On June 12, the labor union at Daewoo Shipbuilding and Marine Engineering announced its opposition to the company’s plans to liquidate the special-purpose ship division and to “artificially” reduce the workforce. The union is planning to hold a general meeting on June 13 and to have its 7,000 members vote on whether or not to strike by June 14.

In addition, the union at Hyundai Heavy Industries is planning to pass a resolution to take labor action over the collective wage agreement during a meeting of union delegates on June 17.

The corporate recovery plan announced on May 20 by Daewoo Shipbuilding and the Korea Development Bank includes a measure to turn the company’s special-purpose ship division into an independent subsidiary and to sell part of the stock to strategic investors.

The union regards the plan to spin off the division as part of an effort to sell Daewoo Shipbuilding to foreign buyers. Since the company currently builds submarines and other ships for the defense industry, company creditors have been blocked from selling Daewoo Shipbuilding overseas, but if the special-purpose ship division were spun off, the company could be sold to buyers in China or elsewhere, the union believes.

Another contentious aspect of the recovery plan is the measure to reduce productive capacity by 30% and the workforce by 20%, while decreasing the number of construction docks from seven to five by 2020.

“Even if we resolve to strike during the general assembly on June 13 and 14, we aren’t planning on moving into action right away, but we do intend to prepare for what will happen in the future,” said a source at the union.

Hyundai Heavy Industries has prepared a recovery plan in which it hopes to recover 3.5 trillion won (US$2.98 billion) by spinning off non-core businesses, and it notified the union on June 9 that 994 workers who are in charge of facility support jobs such as maintenance, power, equipment and facility construction would be moved to these new companies.

Last month, Hyundai reportedly persuaded about 500 workers on the line who had been with the company for two decades or more to sign up for a voluntary retirement program. In addition, 4,527 subcontractor employees, or 13.2% of the total, have left the company during the past five months.

“The company is holding to this ridiculous management strategy of driving away high-performing workers through voluntary retirement and spinning off business divisions. During our delegate meeting on June 17, we’re planning to pass a resolution to take labor action about the collective wage agreement,” said Baek Hyeong-rok, chairman of the union.

If the resolution for the labor action is passed and a majority of union members vote in favor of the labor action, the union will secure the legal authority to call a strike.

Last month, the workers’ council at Samsung Heavy Industries proposed that the company freeze wages on the condition that it guaranteed workers’ jobs. But the company ignored this proposal and unilaterally announced a recovery plan that involves raising 909 billion won by reducing the work force, docking wages and cutting benefits.

By Jeong Eun-joo and Park Tae-woo, staff reporters

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