Korean shipbuilding and tire sectors hit by partial walk-outs

Courtesy of Yonhap News

South Korea’s shipbuilding and tire industries are facing a setback as labor union groups launch partial strikes, demanding improved working conditions.

The labor unions of leading Korean shipbuilding companies staged joint partial strikes on Wednesday, lasting between 3 to 5 hours.

HD Hyundai Heavy Industries Co. workers struck from 2 p.m. to 5 p.m., while Hanwha Ocean Co.‘s union struck for about four hours.

The strikes involved only a portion of union members and reportedly caused minimal disruption at the shipyards. Samsung Heavy Industries Co.’s union chose to hold a tent protest led by executive members.

These actions come as the shipbuilding industry is experiencing a boom, with increased ship orders boosting performance.

After recording over 1 trillion won ($750 million) in losses between 2021 and 2022, HD Hyundai Heavy Industries swung to a profit of 178.6 billion won last year.

Hanwha Ocean, which faced around 3 trillion won in losses during the same period, is also expected to raise profit this year.

The three major shipbuilders have secured contracts for the next three to four years, with operation rates nearing 100 percent in the first half of this year.

Industry experts predict that wage and bargaining negotiations may be prolonged, with unions pressing for better conditions as the market improves.

The HD Hyundai Heavy Industries union is demanding a base pay increase of 159,800 won, an extension of the retirement age to 65, and the removal of the wage peak system.

Despite 18 rounds of negotiations since early June, no significant progress has been made, leading to further partial strikes on September 4, 6, and 9.

Hanwha Ocean’s union and management, in talks since May, are also at an impasse.

“Shipbuilding workers, who have endured sacrifices during the industry‘s downturn, are now raising expectations with the market’s improvement,” said an insider. “Full-scale strikes could occur as negotiations remain tough.”

In the tire industry, Kumho Tire Co.’s union initiated a partial strike on Wednesday, disrupting production at its factories.

Production is expected to resume Thursday afternoon, and the strike is anticipated to impact the output of up to 120,000 tires.

Kumho Tire’s union described the strike as a “warning.”

Negotiations, which began in early June, have not yet yielded an agreement after 15 meetings. The union is seeking a base pay increase of 159,800 won, performance bonuses, and job security.

If demands are not met, the union plans an indefinite general strike starting in early September, which could severely impact Kumho Tire’s recent growth momentum following years of poor performance.