Hanwha Ocean and HD Hyundai Heavy Industries are facing serious challenges in labor negotiations. While South Korea's shipbuilding industry is experiencing increased demand and joint projects between South Korea and the United States, these two companies are at odds over the standards for calculating and increasing performance bonuses.
Agreements by Samsung Heavy Industries
On September 23, Samsung Heavy Industries became the first of the three major shipbuilding companies to finalize wage negotiations. Union members of this company voted 58.78% in favor of a 5.2% increase in the base wage, which included periodic increases and a performance bonus of 7 million won.
This agreement also included a revision of the standards for calculating performance bonuses, changing from 20% of economic value added to 10% of operating profit. These changes contribute to greater transparency in performance distribution and are expected to have a positive impact on improving revenues and labor-management relations.
Current Challenges for Hanwha Ocean and HD Hyundai
However, Hanwha Ocean and HD Hyundai Heavy Industries have yet to reach an agreement on performance bonuses. On September 22, negotiations between the two companies did not yield results. The Hanwha Ocean workers' union has requested an increase in the base wage to 149,600 won and an expansion of bonuses, while management has proposed forming a working group to improve the bonus system.
These disputes have led the labor union to halt operations on some key cranes, including the Goliath crane. This situation could result in delays in construction processes, particularly in critical stages such as block installation.
There are significant concerns regarding the impact of these production disruptions, especially at a time when there is an unprecedented backlog of orders. If these disruptions continue, cost burdens, including cash penalties due to delays in construction schedules, will increase.
Analysts also warn that if these disruptions recur while South Korea and the United States are seeking to strengthen strategic cooperation in shipbuilding and defense, it will not only reduce confidence in domestic factories but also undermine the momentum of defense and export projects.
