2,000 employees, consisting of 25 percent of the full-time workforce, of Hyundai Heavy Industries, the biggest shipbuilding company in the world, went on strike over wages that remained the same since “eight years ago” even though the company is doing well.
The strike was scheduled to end in the first week of May but was extended as the union failed to reach an agreement with the company’s management. On May 12, the strike ended when all parties reached an agreement. Despite the agreement, the strike hinted at a deep-rooted trust deficit between the workers and management.
Hyundai Heavy Industries claimed it has been going through financial difficulties for years. The company had carved off existing businesses into subsidiaries, laid off workers in 2015, froze wages and pursued a merger with Daewoo Shipbuilding & Marine Engineering.
In August last year, the union and management started negotiation and in April agreed on a tentative agreement to a 73,000 won (US$57) increase in basic wages, a 148-percent performance bonus, and a 2.5 million (US$1,940) won bonus. However, union members turned down this agreement.
An official from the union told Maritime Fairtrade that members voted against the agreement because they thought the company was capable of giving a bigger raise, as it has received more orders since the pandemic happened.
“The increase in the basic pay was smaller than what we had expected, and many of the other suggestions we made were not included in the agreement,” said the official who did not want to be named because of the sensitivity of the issues.
The agreement that passed on May 12 was similar to the first agreement proposed in April but included a promise that the company will apply higher pay scales to employees with more years of work experience.
The union official told Maritime Fairtrade that some senior employees’ salaries are not that much higher than employees who joined much later than them. For example, an employee with 10 years of service gets paid 1.6 million won (US$1,240) per month, while someone with seven years of service receives about the same.
“We have been telling the management that applying a similar pay scale to all categories of employees is not fair,” the official said. “We wanted to be heard by the company through the strike.”
Additionally, some union members gave feedback that they were not satisfied with the first agreement because it did not include a promise to reinstate dismissed employees. However, many members still showed their appreciation for union officials. “We should compliment how hard union leaders fought for us,” a member said.
Meanwhile, union members from Hyundai Construction and Hyundai Electric voted against the second agreement. Union officials from these two subsidiaries will continue to negotiate with management until a settlement is reached.
The unnamed union official told Maritime Fairtrade that in general, employees have a distrust of management since 2015, when the company started to cut its budget.
He said: “Our salaries froze for the past eight years, and we have been wondering why, because the shipbuilding industry has been booming for a while now.” He added that the union had also not been happy after learning that shareholders received dividends while the management claimed the company was not doing well.
“So, in a way, the strike was to show the distrust the workers have for the management.”
Photo credit: iStock/ Iam Anupong