South Korea’s shipbuilding industry is bracing for another round of strikes, following the recent labor unrest at Samsung Electronics. The strikes, set to begin on August 28, come at a time when the industry is experiencing a景气 period after years of losses. However, the potential disruption to production is a major concern.
Strikes Affect Major Shipbuilders
The strikes are set to be a joint effort by unions representing workers at South Korea’s major shipbuilding companies. According to reports, the Hyundai Heavy Industries union will stage a three-hour partial strike from 2 p.m. to 5 p.m. on August 28. The Hyundai Samho Heavy Industries union will follow suit, conducting a three-and-a-half-hour strike from 1:30 p.m. to 5 p.m. The Hanwha Heavy Industries union will also participate, with a four-hour partial strike in the afternoon.
Samsung Heavy Industries has also decided to go on strike, but instead of halting production, the company will hold a sit-in protest in tents.
Strike Demands
The main demands of the striking unions include:
- Increasing the basic wages of union members
- Implementing a wage ceiling system
- Extending the retirement age and increasing new hiring
Specifically, the HD Hyundai Heavy Industries union is calling for an increase of 159,800 KRW (approximately 842 RMB) in the basic wage for this year, extending the retirement age from the current 60 years to 65, abolishing the wage ceiling system, and changing the calculation standard for performance bonuses.
Worker Salaries and Industry Performance
In South Korea, the average annual salary for shipyard workers is approximately 1.9 million RMB, with an average hourly wage of 91.6 RMB. The average salary range for shipyard workers is between 1.4 million and 2.2 million RMB. Typically, the highest education level of shipyard workers is a high school diploma or below.
This year, the average utilization rate of South Korea’s shipyards reached 105.2%, the highest level in the past five years. The utilization rate exceeded 100% in the first half of the year, with Samsung Heavy Industries at 112% and Hanwha Heavy Industries at 100.7%.
Order Backlog and Labor Shortage
The order backlog for shipyards in South Korea stands at 74.49 billion RMB for the country’s shipbuilding and marine engineering companies, 236.28 billion RMB for Samsung Heavy Industries, and 228.36 billion RMB for Hanwha Heavy Industries. Compared to the order backlog, the shipbuilding industry is facing a labor shortage. With years of work ahead, the unions’ partial strikes are expected to disrupt production.
Samsung’s Failed Strike
The strike at Samsung Electronics began on July 14 and lasted for about three weeks. However, the prolonged unpaid strike took a toll on the employees’ financial situation, prompting the union leadership to issue a复工 order in early August. The strike did not result in any successful agreements with the company.
The union’s chairman stated, This is not a failure, but a change in tactics. The union, with over 31,000 members, plans to conduct guerrilla-style or surprise strikes but has not disclosed the frequency or number of planned strikes.
South Korea’s shipbuilding industry is facing a challenging situation as it grapples with labor strikes and the potential for production disruptions. The success of the strikes will likely have a significant impact on the industry’s future.
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