Doosan Heavy Industries, from Layoffs to Shutdowns... Labor-Management Conflict Reaches Peak

Following the Second Voluntary Retirement, Over 350 Employees Begin Leave of Absence... Union Criticizes as "Step Toward Dismissal"
Local Governments and Political Circles Support Union's Position... Next Week's Final Self-Rescue Plan Could Be a Variable

[Asia Economy Reporter Ki-min Lee] As Doosan Group is scheduled to submit the final financial restructuring plan (self-rescue plan) for business normalization to creditors next week, labor-management conflicts at Doosan Heavy Industries & Construction are reaching a peak. Local governments and political circles in Changwon, Gyeongnam, where Doosan Heavy Industries & Construction headquarters is located, have also come out in support of the union's position, making union persuasion a major variable in Doosan Group's restructuring.

According to Doosan Heavy Industries & Construction and industry sources on the 22nd, as the workforce restructuring at Doosan Heavy Industries & Construction is progressing rapidly, the Metal Workers' Union Doosan Heavy Industries Branch (the union) is strongly opposing it. Doosan Heavy Industries & Construction judged that more than 1,200 personnel restructuring was necessary to reduce annual fixed costs such as labor costs by 150 billion to 200 billion KRW, and from February 20 to March 4, it accepted applications for voluntary retirement from employees aged 45 and above (born in 1975 or earlier). However, only about 650 employees left the company through the first voluntary retirement. Since the number of voluntary retirees fell short of initial expectations, Doosan Heavy Industries & Construction introduced a second voluntary retirement plan this month. The number of applicants for the second voluntary retirement, conducted from the 11th to the 15th of this month, was only about 100. Consequently, Doosan Heavy Industries & Construction began a temporary shutdown targeting about 350 employees from yesterday until December 31 of this year.

The union is strongly opposing the successive restructuring measures. Although labor and management at Doosan Heavy Industries & Construction are currently negotiating wages and collective agreements, the union claims it has not received specific explanations from management regarding the restructuring. In particular, the union criticized the temporary shutdown as "unfair and a clear step toward dismissal," stating that most employees born between 1960 and 1962, who are under the wage peak system, as well as about 20 employees in their 20s and 30s at the staff and assistant manager levels, were included in the shutdown. The union has held rallies in Changwon, Gyeongnam, where Doosan Heavy Industries & Construction headquarters is located, and at Doosan Group headquarters in Seoul, but now plans to escalate its opposition. Next week, the union plans to visit the Ministry of Employment and Labor's Sejong office to submit a protest demanding punishment for the forced shutdown at Doosan Heavy Industries & Construction and to file a relief application with the local labor commission.

The union's dissatisfaction is not only directed at Doosan Heavy Industries & Construction management but also at the government and state-run banks such as KDB Industrial Bank and Export-Import Bank, which are creditors. The union argues that the company was forced to restructure due to a sudden decline in orders caused by the government's abrupt nuclear phase-out policy, increasing their resentment toward the government. Regarding the state-run banks, a union executive stated, "One of the government's recent corporate support policies is employment retention, but the creditors are pressuring restructuring, causing the company to proceed with aggressive workforce reductions. The state-run banks should follow the government's corporate support direction."

[Image source=Yonhap News]

Industry insiders believe that with the union's opposition joined by local political circles, creditors may find it difficult to continue pressuring Doosan Heavy Industries & Construction for restructuring. It is expected that the final self-rescue plan Doosan submits to creditors may partially revise the workforce restructuring section.

Five elected members of the Future United Party?Park Wan-su (Changwon Uichang), Yoon Han-hong (Masan Hoewon), Kang Ki-yoon (Changwon Seongsan), Lee Dal-gon (Jinhae), and Choi Hyung-doo (Masan Happo)?issued a joint statement on the 22nd urging the resolution of Doosan Heavy Industries & Construction's management crisis. They called for the abolition of the government's nuclear phase-out policy and appealed to Doosan Heavy Industries & Construction to seek win-win solutions through dialogue with workers.

Heo Seong-moo, mayor of Changwon and a member of the Democratic Party, also issued a statement the day before, appealing, "Considering the living and economic disadvantages and difficulties faced by workers who must leave the company due to ongoing voluntary retirements, as well as the negative effects on the local economy, I hope that maintaining employment will be prioritized above all else."

This content was produced with the assistance of AI translation services.