SOUTH KOREA: Hyundai Heavy Industries Workers Endorse Strike

Sunday 26 October 2014

Date: 22 October 2014

Source:The Wall Street Journal

Type: News

Keywords: Workers, trade union

SEOUL—Unionized workers at Hyundai Heavy Industries late Wednesday endorsed a possible strike over wage and benefit issues, threatening to halt production at the world’s biggest shipbuilding company for the first time in 20 years.

About 18,000 union members, or two-thirds of the South Korean shipbuilder’s total workforce, overwhelmingly voted to walk off the job as early as next month, said union spokesman Kim Hyung-gyun Thursday.

“Despite the vote result, union leaders will try to seek a negotiated wage deal with the management this week. But if the company doesn’t accept our demand, we have no other choice but to go on strike,” he said.

A company spokesman said both sides will meet later Thursday and intense negations could start as early as Friday.

Labor unions downing tools after inconclusive wage talks is common around this time of year in South Korea.

But this year, any significant work stoppage will prove more damaging to Hyundai Heavy as the company reels from an appreciating local currency amid a slowdown in the global shipbuilding industry.

If workers strike, it will be the first affecting Hyundai Heavy since 1994 when a 63-day stoppage cost it 530 billion won ($522 million).

Union demands include a 6.5% rise in basic pay and a 250% year-over-year bonus increase. The company says that is too much.

Slowing demand from weak economies in Europe and growing competition from Chinese rivals have pummeled major shipbuilders in South Korea for years. The South Korean companies have also offered deep discounts to clients to secure a steady stream of orders.

In the second quarter of 2014, Hyundai Heavy posted its worst performance ever with an operating loss of 1.1 trillion won.###

See online : The Wall Street Journal

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