Union Offers to End DSME Shipyard Strike After Days of Pressure

Korean shipyard strike
Subcontractors have been on strike for 50 days at the DSME shipyard in South Korea (file photo)

Published Jul 21, 2022 3:53 PM by The Maritime Executive

Striking subcontractors at South Korea’s Daewoo Shipbuilding and Marine Engineering yard have reportedly decided to accept management’s offers and end their prolonged strike and occupation of a VLCC tanker under construction at the yard. In a report first carried by Reuters and confirmed by Korean media, the subcontractor’s union has agreed to end its action if DSME agrees not to pursue legal cases against the union for damages.

Faced with increasing pressure from the government and with the potential of police intervention growing, the union and representatives of the shipyard resumed negotiations. Initial reports said the two sides remained far apart with DSME firm on its offer of a 4.5 percent wage increase in response to the union’s demands for up to a 30 percent increase. Recent reports said that the union was now seeking a 5 percent increase along with the agreement not to seek damages due to the strike.

South Korea’s news agency Yonhap is reporting that the police are prepared to move to end the strike at any time. The news agency said the police would respond if the current negotiations failed. Earlier, South Korea’s president Yoon Suk-yeol hinted at the use of police saying the time had come to end the illegal action.

Yonhap also noted a softening in the tone of the president’s remarks on Thursday. At the beginning of the week, Yoon voiced harsh criticism over the now 50-day long strike. This morning he said the people wish the strike to come to an end. He said a quick resolution would be helpful to everyone.

While the union representing DSME’s full-time employees has also been critical of the strike, the workers said they would stand with the strikers if the police attempted to move in to end the occupation. They have said there must be a negotiated settlement while also saying the occupation should end.

DSME continues to say that the strike has cost the company more than $400 million. On Wednesday, a spokesman told Reuters that the shipyard was delaying deliveries for eight vessels under construction for anywhere from two to five weeks.

Concerned by the prolonged strike, Business Korea reports that South Korea’s largest shipbuilder, Hyundai Heavy Industries Group convened a meeting of its divisional presidents to discuss the business environment in shipbuilding. They reported that the company said what has been a booming period is evolving into a crisis. They pointed to the impact of rising costs, global inflation, and the war in Ukraine as creating challenges. 

Business Korea reports that Hyundai is also commencing contract negotiations with the unions at its three shipyards. In a first-ever move, the three unions have come together with a unified demand for a 7.5 percent wage increase as well as several smaller concessions.