Record-Breaking Shipbuilding Orders, But No Workers Available in the Industry

Number of Industry Workers Halved in 8 Years
Production Workforce Short by 8,000 This Year
Business Conditions Improve... 7 Trillion Won Orders in January
Full Effort to Secure Workforce Including Technical Trainees

[Asia Economy Reporter Jeong Dong-hoon] Jeon Woon-sang (41, pseudonym), an employee at a large shipyard, continues to work on shipbuilding sites even after being promoted to the managerial position of deputy general manager. This is because there is a flood of orders but a shortage of personnel on site. Jeon said, "Even when new employees are hired and trained, they soon leave for companies in the metropolitan area," adding, "Skilled workers are also leaving shipyards for so-called 'money-making sectors' like semiconductors or secondary battery facilities, which is the reality for shipbuilders." Kang Moon-jun (52, pseudonym), an executive at a shipbuilding subcontractor, revealed, "Although order volumes have increased, manpower supply is not keeping up," and added, "Due to the lack of skilled workers, we may have to return the orders received from shipbuilders."

The shipbuilding industry, which experienced a boom in orders last year, is now facing a manpower shortage. Prolonged recession caused by intense restructuring and a long order drought led to a mass exodus of skilled workers, and recruitment of new personnel has been sluggish. Despite the accumulation of orders, the lack of workers to deploy on-site has put operations at risk of not being carried out properly.

According to the Ministry of Trade, Industry and Energy and industry sources on the 8th, it is estimated that up to 8,000 workers will be needed this year in production sectors including shipbuilders and subcontractors, mainly in shipbuilding hubs (Busan, Ulsan, Gyeongnam, Jeonnam). By quarter, shortages are projected as 3,649 in Q1, 5,828 in Q2, 8,280 in Q3, and 7,513 in Q4. Even with short-term training programs and hiring experienced workers, it is uncertain whether such manpower supply can be met. Although orders for eco-friendly and future ships such as liquefied natural gas (LNG) vessels are increasing due to decarbonization policies, the shortage of labor is at a level that cannot handle this demand. The government has announced the ‘K-Shipbuilding Reboot Strategy’ to train 8,000 shipbuilding workers and expand new workforce inflow this year, but its effectiveness remains uncertain.

The number of shipbuilding workers has dropped to half compared to eight years ago. The workforce, which exceeded 200,000 in 2014, fell to 92,207 as of last year. Skilled workers left the industry due to long-term recession and restructuring, and it is difficult to recruit young workers in their 20s and 30s due to perceptions that the industry is ‘tough and lacks growth potential.’ On-site, there are complaints that "even if you look hard, you cannot find people in their 20s and 30s who are said to be struggling with employment."

On the 25th of last month, a skilled worker was seen working at the headquarters of Daewoo Shipbuilding & Marine Engineering in Geoje-si, Gyeongnam, one of the nation's big three shipyards.
[Image source=Yonhap News]

On the other hand, the shipbuilding industry is experiencing a ‘favorable wind.’ The combined orders of Korea’s ‘Big 3’ shipbuilders?Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering?exceeded 7 trillion won in January alone. Their dominant position in the global eco-friendly ship market, including LNG-powered ro-ro ships (vessels that can be loaded or unloaded via ramps) and bunkering vessels (fuel supply ships), played a significant role. Typically, the shipbuilding industry proceeds with design work for about a year after securing orders before starting construction. Large-scale manpower deployment is expected to begin as early as the first half of this year.

The shipbuilding industry is making every effort to secure labor by recruiting technical trainees on a rolling basis as the skilled worker gap lengthens, but the situation remains difficult. Each company operates specialized training programs, but some lectures were conducted remotely last year due to COVID-19 prevention measures, slowing progress.

Some argue that for regional economic recovery, shipbuilders and local governments should jointly provide financial support for housing and welfare. Kim Young-hoon, professor of Ship and Ocean Systems Engineering at Gyeongnam National University, said, "The government estimates that about 8,000 workers are needed in the shipbuilding industry, but including other equipment suppliers, even more manpower will be required," expressing concern that "a significant portion of workers have already left shipbuilding for other industries." He advised, "There needs to be definite welfare benefits or incentives to bring back those who have left."

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