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Government and Courts Press DSME Subcontractors to End Shipyard Strike

subcontractors strike at Daewoo Shipbuilding South Korea
Pressure is growingto end the six-week old strike at DSME (DSME file photo)

Published Jul 18, 2022 3:11 PM by The Maritime Executive

Pressure is mounting on the striking subcontractors at the Daewoo Shipbuilding and Marine Engineering (DSME) shipyard to end their six-week strike and occupation of at least one of the VLCC tankers under construction at the shipyard. South Korea’s courts, president, and prime minister along with the heads of the ministries are all calling on the strikers to end its action saying it is endangering not only DSME but the entire shipbuilding industry. So far, the union representing the subcontractors appears to be holding out on its demand that the government mediate a settlement to the strike that began on June 2.

At least 150 members of the union representing subcontractors for the shipyard remain on strike with reports saying six or more of the individuals are occupying a VLCC under construction and approaching its delivery date. They have been successful in preventing work on the tankers and last Friday the strikers said they would be on a hunger strike until the government intervenes. They have demanded that the Korea Development Bank, which is the largest investor in DSME having saved the yard from a financial collapse, get involved to bring the government to end the dispute.

The subcontractors say that their members are earning nearly minimum wage for skilled work on the vessels. They also point to the dramatic growth in the orderbook for DSME and all of the Korean shipbuilders. The union is demanding better working conditions, a 30 percent increase in wages, and one-year employment agreements.

After South Korea’s prime minister and other government officials denounced the strike last Friday as “an illegal occupation of a place of manufacturing,” a district court also approved a request for an injunction filed by DSME. The shipyard asked the court to order the striking workers to stop occupying a ship in the dry dock at its Okpo shipyard, on Geoje Island. The court said the unionized workers will have to pay approximately $2,270 per day to DSME if they don’t end the occupation of the ship and dry dock, but the union said it plans to appeal the court order.

Pressure has also been mounting among other unions including the one representing the full-time employees of the shipyard. The umbrella organization for all of Korea’s labor unions, the Korea Enterprises Federation, which provides collective bargaining, also released a statement on Sunday saying the workers should stop their illegal strike and quickly return to work.

South Korea’s president Yoon Suk-yeol spoke out about the situation on Monday during his weekly meeting with the prime minister. The Korean news agency Yonhap reports that "President Yoon emphasized that the rule of law must be established and that illegal situations at industrial sites must be brought to an end.”

The prime minister convened a meeting of five ministers, including finance and justice, and after the meeting, they read a joint statement again condemning the strike and vowing to take action against the strikers. The ministers warned the strikers could face criminal punishment and would be accountable for financial damage. This came after DSME today also accused the strikers of damaging equipment in the shipyard.

"At a time when painstaking efforts for business normalizations are needed, the illegal strike dampened expectations by DSME workers and the public,” said Finance Minister Choo Kyung-ho reading the ministers’ prepared statement. “The shipbuilder is in a desperate situation…. It is an irresponsible act that could break down the trust the Korean shipbuilding sector has built.”

The ministers highlighted that South Korea has invested more than $5 billion into restructuring the shipbuilding industry and helping it to transition to the future by focusing on high-value and green ships. However, they pointed out the DSME still has a large debt and can ill afford the financial impact of the strike. They are now estimating that the strike has cost the shipbuilder more than $400 million.