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Hunger Strike by DSME Subcontractors After Government Denounces Strike

DSME subcontractor strike
Subcontractors remain on strike at DSME saying they will stage a hunger strike as the government denounced their actions (file photo)

Published Jul 15, 2022 4:27 PM by The Maritime Executive

Defying government calls for a settlement and pressure from fellow union members, the striking subcontractors at South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME) are vowing to fight on for their demands of wage increases and improved working conditions. A day after the government denounced their strike as illegal, the workers said they would begin a hunger strike to call new attention to their demands. 

The strike started at the beginning of June when DSME, one of South Korea’s big three shipbuilders, rejected demands for a 30 percent wage increase from subcontractors. The shipbuilder, which has already been experiencing increasing financial losses and is largely owned by the government-controlled Korean Development Bank, rejected the demands citing rising costs and labor shortages which are leading to the company’s mounting financial losses.

South Korea’s new Prime Minister Han Duck-soo only two months after he was sworn into office is facing the growing crisis that he has called a threat to Korea’s economy which is already under pressure from high inflation and slowing consumer spending. He has urged the unionized workers to halt their strike for the good of the country.

Union members however have continued to block work at the Geoje Island shipyard and since mid-June have been occupying three VLCC tankers currently under construction at the yard. The militant leader of the union has reportedly locked himself in a cage on the deck of one of the vessels, refusing demands to permit work to continue at the shipyard.

With the strike reaching 40 days and no resolution in sight, government officials have begun speaking out, but instead of meeting the union’s demand for the government to mediate, they have called the strike, “an "illegal occupation of a place of manufacturing” saying that the action is highly concerning. The labor minister and industry minister both during a press conference on Thursday urged the union to halt their actions. They warned that it was mutually destructive to management and labor and especially hurting the small companies that are contractors to the shipyard.

"Korea's shipbuilding industry has recovered thanks to soaring demand for eco-friendly ships after years of struggle. The longer the strike continues, the more immense the losses will become," said Lee Chang-yang, Minister of Trade, Industry, and Energy. "We hope to build a cooperation-driven management-labor relationship," he commented but the government offered no steps to aid in ending the strike.

The minister reported that DSME has suffered losses estimated at more than $430 million since the strike began. He said the loss in revenue is now approaching $20 million a day while the yard has more than $4 million in fixed costs. They also said the yard faces fines nearing $10 million a month for the late delivery of the tankers.

DSME management earlier in the month declared that the company was in crisis saying they would begin emergency management in an effort to forestall the deepening crisis and mounting financial losses. As the crisis continues to grow at the shipbuilder, another union representing the full-time shipyard employees decided to join with management in calling for an end to the actions of the subcontractor’s union. In a statement at the beginning of the week, the full-time employees called for the end of the “illegal occupation,” saying it was causing serious damage. Members have also called for their local to separate from a shared membership in the Korean Confederation of Trade Unions.

Despite the mounting pressure, the subcontractors appear to be holding to their demands. Responding to the government announcements condemning their actions, they staged a protest in front of the offices of the Korea Development Bank. "We demand prompt action from the government to put this struggle to a mutually agreeable end," they said at the protest calling on KDB as the controlling shareholder in DSME to get involved in bringing the government and the shipyard to the negotiating table for a government mediated settlement.