Zim's Employees Go Out On Strike as Hapag Merger Moves Forward

Employees of Israeli shipping firm Zim have gone on strike to protest the labor terms of the firm's sale to Hapag-Lloyd, according to local media. Union officials told CTech that they are concerned that Hapag-Lloyd wants to offer early retirement to many longtime employees instead of keeping them on.

On Thursday, about 900 of Zim's employees went out on strike amidst talks on a new collective bargaining agreement for the workers' union. On the side of management, Zim, Hapag-Lloyd and the Israeli investment fund FIMI are all involved in the discussion, according to Israeli business news outlet CTech. The walkout covers almost all of Zim's employees in Israel, and has reportedly shut down the carrier's local operations.

The $4.2 billion merger deal will see Hapag-Lloyd and FIMI buy all of Zim and delist it from the NYSE. Hapag will keep most of the line's global operations and chartered-in tonnage; FIMI will keep Zim's routes to and from Israel, along with its owned tonnage, preserving the carrier's national-defense role.

The sale was controversial from the start, as Zim is part of the origins, identity and security of the modern state of Israel. Critics have warned that the surviving Israeli-owned component of Zim will be too small to prosper, and that the transition will lead to downsizing and layoffs.

It is the second time that the union has initiated labor action since the deal was announced. In mid-February, the workers committee at Zim staged a "warning strike" in protest of the deal and the prospect of job losses, supported by the Histadrut (General Federation of Labor in Israel). The strike ended after the two sides agreed on a $300 million severance package for 500 affected workers.

"ZIM is not just another company in Israel. It is a strategic asset of the State of Israel, representing a critical link in national security, in the stability of supply and in the ability to maintain trade by sea even in emergencies. Any harm to the stability of the company or to its employees means harm to the national interest of the State of Israel," said the Histadrut in a statement during the February strike.

The union will soon have different company leadership to negotiate with. Zim CEO Eli Glickman, a previous and unsuccessful bidder for ownership of the shipping line, has announced plans to step down after a six-month notice period. The company's board is searching for a successor. In a statement, Glickman said that he, too, disagreed with the company's sale.

"In recent months, the Board promoted a merger process with Hapag-Lloyd. While I respect this direction, after careful reflection, I concluded that I cannot continue as CEO. Leadership, to me, is not a title – it is a commitment that must align with the road ahead," he said in a statement.