Senseless strikesKorean shipbuilders have been hit hard by a prolonged market slump and face more uncertainty as the global economic outlook stays foggy. Yet the unions of the three majors - Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries - announced that they will enter a joint strike next month to protest salary freezes.
The global economy is ever more uncertain as China’s economy slows. The local economy has been rocked by multiple events. The government is trying to push ahead with labor reforms in order to improve the country’s growth potential. There’s no time to whine about salary freezes - let alone a strike - when the economy is struggling and companies are losing billions of dollars.
Hyundai Heavy Industries has been incurring operating losses for the seventh consecutive quarter. It reported a deficit of 3.25 trillion won ($2.71 billion) last year. Its operating losses reached 171 billion won in the second quarter alone. The company’s stock price, which hovered above 500,000 won four years ago, has sunken to the 80,000-won range. The company dismissed over 100 executives in cost-saving measures. Yet its union is demanding hikes in pay and other compensations amounting to 250,000 won a month. It also wants the company to scrap the peak wage system and is threatening a partial walkout as well as a joint strike with other shipbuilders.
At Samsung Heavy and Daewoo Shipbuilding, the unions are making similar demands. The three shipbuilders have posted combined operating losses of 4.75 trillion won just in the second quarter, but employees average between 70 million won to 80 million won per year - making them among the highest-earning workers. Union members claim the losses are due entirely to mismanagement by the employers. The employers are, of course, largely to blame. They have been losing money through competing to win offshore plant projects. Still, employers and employees must become united to weather current woes through restructuring efforts.
Clients would shun shipyards that go on strike, fearing poor labor quality. The shipbuilders’ credibility is on the line. Striking would only make matters worse for the companies. The greed and selfishness of the unions of large companies have been dubbed as some of the biggest weaknesses of Korea’s industry. The Korean economy has no future without reforming unions.
JoongAng Ilbo, Aug. 24, Page 30