In South Korea, a New Push to Phase Out Foreign Workers in Shipyards
It is no secret that Korea's shipbuilders have a shortage of domestic labor, and have been recruiting immigrant workers from Southeast Asia and elsewhere to fill the gap. But the country wants to turn the corner and begin supplying its own labor pool domestically, especially as it is trying to win American orders for Korean-built tonnage under the "Make American Shipbuilding Great Again" partnership, as defined by the new White House Maritime Action Plan (MAP). The MAP envisions a role for legally-American ships built by allies, so long as foreign yards also invest in American capacity and construct follow-on vessels in the United States. Only Korea's "Big Three" firms have public strategies geared towards fulfilling that arrangement.
According to Business Korea, HD Hyundai - builder of the nation's Aegis-equipped warships - has plans to phase out its foreign immigrant workforce beginning this year. As each guest worker's visa expires, HD Hyundai will replace them with a Korean national, either a new entrant to the industry or an experienced yard worker. The policy aligns with a recent request from President Lee Jae-Myung to strengthen hiring of Korean nationals in Korean shipyards.
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Korean workers offer a major advantage in that they do not have time-limited visa restrictions, which force guest workers to leave after gaining experience. The challenge lies in attracting young Koreans to the difficult labor of shipbuilding, and in convincing them to relocate to factory towns like Ulsan, HD Hyundai's home base; such locations are low on the list of desirable places to live for the new generation of workers, Business Korea reports.
Even if Korea's Big Three fully insource their labor needs for domestic yards, they will still have access to foreign labor through overseas holdings and partnerships. HD Hyundai has acquired a mega-shipyard in Subic Bay, near an abundant Philippine labor pool in the Manila metro area; it also has a new joint venture partnership with Cochin Shipyard in India, which recently secured a large boxship order from CMA CGM using Korean technology.