HMM Labor and Management Reach Dramatic Agreement After 77 Days of Wage Negotiations... Avoid Logistics Crisis (Comprehensive Report 2)

[Asia Economy Reporter Dongwoo Lee] The labor and management of HMM, the largest domestic deep-sea container shipping company, have reached a dramatic agreement on wages and collective bargaining (wage and collective agreement) after 77 days since negotiations began in June. The settlement is expected to alleviate concerns over logistics disruptions for domestic export companies due to strikes.

According to HMM on the 2nd, HMM President Bae Jae-hoon, Kim Jin-man, Chairman of the Land Labor Union, and Jeon Jeong-geun, Chairman of the Maritime Labor Union, signed the final wage agreement at HMM headquarters in Jongno-gu, Seoul, on the morning of the same day, which includes a 7.9% wage increase and payment of encouragement and incentive bonuses amounting to 650%.

The wage increase will be applied retroactively from January 1 of this year, and the encouragement and productivity incentive bonuses will be paid within the year. In addition, labor and management agreed to form a jointly participated task force (TF) to work on restoring wage competitiveness and establishing a performance bonus system.

The negotiations were dramatically concluded after an overnight session starting at 2 p.m. the previous day. The final negotiation proposal lowered the wage increase rate by 0.1% compared to the company's initially proposed revision, but the union accepted an additional 150% performance bonus, leading to a dramatic settlement.

Previously, the management and the land and maritime labor unions conducted four rounds of collective bargaining but failed to narrow their differences and applied for dispute mediation at the Central Labor Relations Commission. In response, the management proposed a final negotiation plan including an 8% wage increase and 500% performance bonus as a mediation proposal, which the land and maritime unions each voted on and rejected.

Following this, the Maritime Labor Union indicated its intention to submit collective resignation letters from about 300 union members to the management, heightening tensions over the possibility of a strike becoming a reality. Through labor-management consultations, the Maritime Labor Union's planned collective resignation submission and the scheduled onboard protest for the day are expected to be temporarily concluded.

Kim Doo-young, Chairman of the National Maritime Labor Union Council, is speaking at the 'HMM Land and Sea Labor Unions Joint Emergency Press Conference' held on the 2nd at the Office and Financial Labor Union meeting room in Jung-gu, Seoul. From the left, Jeon Jeong-geun, Chairman of the Sea Labor Union; Kim Jin-man, Chairman of the Land Labor Union; Lee Jae-jin, Chairman of the Office and Financial Labor Union; and Chairman Kim. Photo by Moon Ho-nam munonam@

The industry is also showing a sense of relief. Export companies have avoided the direct blow of logistics chaos caused by the realization of a strike. There was an analysis that if the union actually carried out a three-week strike, the resulting damage could reach 680 billion KRW.

HMM labor and management plan to devote themselves to becoming a global top-class shipping company following this wage negotiation settlement.

An HMM official said, "We apologize for causing concern among the public that a logistics disruption might occur due to prolonged negotiations," adding, "Considering the difficult circumstances such as COVID-19 and the impact of the shipping industry on the national economy, labor and management were able to reach an agreement by making mutual concessions."

Kim Jin-man, Chairman of the Land Labor Union, said at a press conference after the agreement, "Although the agreement is not a wage increase level that satisfies the union members, we could not stand by as concerns over logistics chaos grew," emphasizing, "We agreed on a magnanimous level to complete the reconstruction of the shipping industry." Jeon Jeong-geun, Chairman of the Maritime Labor Union, also said, "Since we conducted negotiations bearing the heavy burden of the shipping industry responsible for 99.7% of import and export logistics, we hope the public recognizes the hard work of the seafarers."

The union added, "This is only a temporary suspension of the struggle. If the management acts as it did in the past, we will resume the struggle." Regarding the creditors, including the Korea Development Bank, which is the company's largest shareholder, they emphasized, "Our goal is for KDB to recover public funds as soon as possible," and "Only then can a normal labor-management relationship be restored."

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