The labor relations of Hyundai Heavy Industries(HHI) are trapped in a vicious circle. The collective bargaining for wages and working conditions this year came to a standstill, since the management has put pressure on the union to accept the large-scale restructuring plan. The HHI union is also facing a dilemma, as their strike action does not generate the support of public opinion due to the pending industrial restructuring of the shipbuilding industry.
According to the HHI union on October 20, the management and union have completed 46 rounds of negotiations without reducing the difference gap on the wages and working conditions. The HHI union went on strike seven times this year including the latest 4-hour partial strike.
When they commenced the negotiations for the renewal of collective agreement early this year, it was not anticipated that the negotiations would be dragging on for such a long time. In May the union demanded the wage raise of 96,712 won(US$ 85.34), right to recommend outside directors, information-sharing of the decisions of the board of directors, equal composition of the disciplinary committee, and equal number of new recruitment for the vacancies left by the retired workers. Most of union demands were related mainly to the wages and union activities.
However, when the looming crisis of Daewoo Shipbuilding and Marine Engineering(DSME) triggered the restructuring of the shipbuilding industry as a whole, the negotiations at the HHI went in a wrong direction. The HHI made a sudden announcement in mid-June that it would spin-off the tasks of facility support such as 'maintenance, power, equipment and facility construction' into a subsidiary. The HHI planned to transfer 1,000 regular workers to the subsidiary company and in August this year the HII MOS was set up as the subsidiary.
In the beginning of the negotiations in the first half of this year, HII's debt to equity ratio was 134%, financially more stabilized than the ratio of 143% recorded in the previous year. When it was compared with the ratios of other major shipbuilders such as Samsung Heavy Industries(in the range of 300%) and Daewoo Shipbuilding & Marine Engineering(in the range of 700%), the financial situation of Hyundai Heavy Industries was incomparably sound.
However, when the crisis in the shipbuilding industry looms large, HHI did not miss the chance to squeeze the union. A union official said that HHI management was predicting the the business slowdown would turn around with the increase of orders in the latter half of this year, but they suddenly changed their attitude in the negotiations and began to raise the issue of crisis in the shipbuilding industry. After the announcement of the plan to spin-off the tasks of facility support, the management has kept on urging the union a broad-minded decision on the issues of restructuring and wages.
The stalemate in the collective bargaining has not been improved up until today. Furthermore, recently the HHI announced that the separation of businesses of electro & electric and construction equipment would be pursued. Approximately 4,200 employees are currently working in these businesses which is about 20% of the total workforce at the HHI. If electro & electric and construction equipment businesses are separated along with HHI MOS, some 5,000 workers are expected to leave the HHI.
When the business outsourcing is complete, the HHI union membership will shrink from 15,000 to 10,000, with the loss of 1/3 of the union membership. At the negotiations In July, while the union put forward new demands for the resumption of overtime work and restoration of wage cut done for the subcontracted workers, the management repeated its previous position only urging the union for the broad-minded decision and wage freeze.
The HII union plans to organize rallies in Seoul from next week to call on the government to work out for a development plan for the shipbuilding industry and to stop the restructuring plan.
reported by Je Jung-nam
edited in English by Kim Sung-jin