Shipbuilders’ unions call strike over salary freeze

Unions at Korea’s three biggest shipbuilders announced on Friday they will stage a joint strike next month to protest a salary freeze imposed by management following a total operating loss of almost 5 trillion won ($3.9 billion) in the second quarter.

Workers from Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries said they will go on indefinite strike on Sept. 9.

“All of the three companies are blaming us for the tremendous losses this year,” said Kim Hyeong-gyun, a union member of the Hyundai Heavy Industries, by phone. “But those who should take the real responsibility for the losses are not the workers but the management.

“Whether we will continue the joint strike after Sept. 9 and how many hours we will go on is not yet decided,” he said.

The three unions have a combined membership of about 28,000.

Controversy arose at Hyundai Heavy Industries when the union’s leadership decided to offer gift cards for members who will participate in the strike.

“It is true that we made the decision on the gift cards for traditional markets, worth about 5,000 won per hour, for the participant in the strike, which is about 70 percent of the hourly pay of a worker,” said Kim. “It is because we don’t have ‘strike pay’ reserved by the union.”

However, some union members criticized the move.

“Who pays for the gift cards? From our membership fees?” a member said on the union’s Web site. “Isn’t it a choice of an individual whether to join the strike? You should explain this.”

Saenuri Party Chairman Kim Moo-sung condemned the strike plan.

“Unions of the top three shipbuilders, despite the multitrillion won in deficits, announced a strike,” said Kim at a party meeting on Friday.

“The Hyundai union is even saying it will offer gift cards, or even some cash [for some workers with particular skills] if they join the strike … a bourgeois union finally started a ridiculous drama.

“If they don’t scrap the plan, they will face the fury of the public,” he said.

Stock prices of the top three shipbuilders plummeted with the announcement. Hyundai Heavy Industries fell 3.51 percent at the close, Daewoo fell 3.69 percent, and Samsung dipped by 4.11 percent.

Unions from other shipbuilders relatively smaller than the top three, such as STX Offshore & Shipbuilding, have not decided yet whether to join the strike.

The dispute came after the nation’s top three shipbuilders saw a total of 4.7 trillion in deficits and unions were told of a plan to freeze salaries for this year.

It is the first time the country’s three top shipbuilders recorded losses for the same period and the first time the unions have planned strike action.

At the end of July, all of the three top shipbuilders failed to reach agreements with unions on salary negotiations for this year.

At Hyundai, management offered about 100 percent of the monthly wage as a bonus plus 1 million won of compensation for the freeze. But unions demanded a 127,560 won increase in base salary plus a 250 percent bonus increase.

Concerns are rising in the industry over the possibility of further conflicts between management and unions, particularly if management decides on restructurings to make up the losses.

BY KIM HEE-JIN [kim.heejin@joongang.co.kr]