Tensions are rising toward strikes at South Korea's shipbuilding and steel companies as labor and management fail to narrow gaps in this year's wage negotiations. Unions at major workplaces including HD Hyundai Heavy Industries (329180) and POSCO have secured the legal right to strike and are taking a hard line, spreading unease across the industrial sector.
The HD Hyundai Heavy Industries branch of the Korean Metal Workers' Union said 5,379 of 8,127 members voted in favor of industrial action in a ballot held on the 27th, giving an approval rate of 66.18% of total membership. A total of 5,607 members cast ballots, with 219 voting against and nine abstaining.
The result gives the union a legal right to strike. HD Hyundai Heavy Industries management and the union have held 17 rounds of talks since their first meeting in June without narrowing their differences. Two mediation sessions at the National Labor Relations Commission, requested by the union, also failed to produce an agreement.
The two sides will meet again at an 18th round of main negotiations scheduled for the 1st of next month. If those talks also collapse, the union is expected to launch a partial strike to increase pressure on the company. Should intensive negotiations that follow remain deadlocked, a full walkout appears unavoidable.
The core issues are the size of the wage increase and profit sharing. The union is demanding a 149,600-won increase in base pay, a 100% increase in bonuses and the distribution of at least 30% of operating profit as performance pay. The union at HD Hyundai Samho is also calling for roughly 30% of operating profit to be institutionalized as a source of performance pay.
Management says it cannot accept the demands given volatility in the industry and investment burdens. Accepting the performance pay demand would require HD Hyundai to set aside about 1 trillion won ($720 million) in total for HD Hyundai Heavy Industries and HD Hyundai Samho combined.
HD Hyundai Heavy Industries said of the ballot result that it "will engage in negotiations in good faith to narrow the gap between labor and management."
The situation at POSCO is also moving quickly. The POSCO labor union, affiliated with the Federation of Korean Metal Workers' Trade Unions under the Federation of Korean Trade Unions, said in a press release on the 27th that it had set the 9th of next month as the effective final deadline for negotiations and would launch a first 48-hour partial strike unless management made a forward-looking decision.
The union said it "will act without wavering if management demands sacrifices only from the shop floor," while adding that it "will keep the door to dialogue open until the end."
The union stresses that the dispute goes beyond wage increases to fixing working conditions, including accumulated staff shortages, long working hours and improvements to safety and welfare. It says it demanded the establishment of a binding self-sustaining safety special committee involving both sides as the key item in this year's collective bargaining, but that management has insisted on operating an advisory safety consultation body at existing levels. The union also raised concerns that a push for direct employment without adequate preparation has heightened welfare anxiety among existing employees, and that the limited capacity and staffing of the industrial safety and health center threaten workers' right to health.
The union also expressed regret over management's approach to the talks. It said management had publicly disclosed a simple total figure of 1.4 trillion won without explaining the background of the demands or the process of adjusting them, framing the union as making excessive cost demands.
In this year's wage talks, the union has demanded a 7.1% increase in base pay, incentive pay equal to 600% of monthly wages, 50 shares under the employee stock ownership plan and holiday bonuses of 200%. The union argues such compensation is warranted because management has neglected employee rewards, citing a downturn, while continuing large-scale investment in new businesses. POSCO says meeting all of the union's demands would require about 1.4 trillion won, twice the amount sought last year.
The POSCO union secured a legal right to strike on the 18th when the National Labor Relations Commission decided to suspend mediation. A ballot held on the 8th and 9th of last month drew 92.17% support for industrial action. A strike would break a 58-year record without labor disputes since POSCO was founded in 1968.
POSCO said in response to the union's warning of a first partial strike that it "will do its utmost to reach an amicable agreement with the union and conclude the wage negotiations." The company said it would activate an emergency response system to ensure operations continue without disruption even if a partial strike takes place.
