Illegal Dock Occupation Enters 28th Day... Daewoo Shipbuilding Strike Shows No Sign of Ending

Labor and Management in Standoff for 44 Days

Subcontractor Union Declares Hunger Strike
Amid Government's Call to End Illegal Strike

No Negotiation Schedule Set Since the 5th
Calls for Role of Daewoo Shipbuilding and KDB, Not Negotiators

Difficult to Intervene Due to Potential Subcontracting Law Violations
Cumulative Losses Estimated at 600 Billion Won After Strike

On the afternoon of the 14th, Daewoo Shipbuilding & Marine Engineering employees and executives held a "human chain" event urging the suspension of the strike around Daewoo Shipbuilding & Marine Engineering in Geoje-si, Gyeongnam.
[Image source=Yonhap News]

[Asia Economy Reporter Jeong Dong-hoon] As the strike and sit-in of subcontracted workers at Daewoo Shipbuilding & Marine Engineering (DSME) prolong, the labor and management sides are escalating into a 'showdown of strength.' The unprecedented dock occupation sit-in has entered its fourth week, yet negotiations have made no progress. While the government is intensifying pressure to halt the strike on all fronts, and local residents and citizens have taken to the streets forming human chains to urge an end to the strike, speculations about a turnaround are emerging, but finding an exit strategy does not seem easy.

◆Why is the damage increasing due to dock occupation?= According to DSME and industry sources on the 15th, the subcontracted workers' union of the Korean Metal Workers' Union in Geoje, Tongyeong, and Goseong (subcontracted union) has been striking since the 2nd of last month, demanding ▲a 30% wage increase ▲recognition of full-time union officials ▲a 300% increase in bonuses, among other demands. Since the 18th of last month, seven union members belonging to the subcontracted union have occupied an oil tanker and the dock at Okpo Shipyard's Dock 1. Occupying a ship under construction is illegal under the Enforcement Decree of the Labor Union Act.

The dock is where ships are built and launched into the water. If this area stops, work on other production lines such as painting, piping, and welding is delayed, causing serious damage to the shipbuilding industry, where meeting construction deadlines directly affects performance. This is also why previous shipbuilding industry strikes have not escalated to extreme protests like dock occupations. The Okpo Shipyard Dock 1 currently occupied by the union is the world's largest, roughly the size of nine soccer fields, capable of constructing four ships simultaneously. Four ships are under construction here, but the launching of an oil tanker scheduled for last month has been indefinitely postponed. To launch a ship, the dock must be filled with water, but due to the union's occupation sit-in, seawater cannot be filled in the dock. Consequently, DSME's losses are snowballing. It is estimated that DSME is incurring daily sales losses of 25.9 billion KRW and fixed cost losses of 5.7 billion KRW, with cumulative losses since the strike exceeding approximately 600 billion KRW.

On the afternoon of the 14th, Daewoo Shipbuilding & Marine Engineering employees and executives held a "human chain" event urging the suspension of the strike around Daewoo Shipbuilding & Marine Engineering in Geoje-si, Gyeongnam. Photo by Daewoo Shipbuilding & Marine Engineering [Image source=Yonhap News]

Lee Chang-yang, Minister of Trade, Industry and Energy, who is urging the strike to end, pledged a swift resolution to the DSME strike at the Korea Chamber of Commerce and Industry Jeju Forum on the same day. Minister Lee said, "The industry is suffering significant damage, so the labor and management parties must negotiate immediately," adding, "The government and related agencies are considering ways to create a negotiation atmosphere and how to cooperate."

DSME has been experiencing increasing operating losses due to a sharp decline in orders and rising steel prices over the past five years. Last year's operating loss reached 1.7547 trillion KRW, and the first quarter of this year recorded an operating loss of 470.1 billion KRW.

◆Strike continues without negotiation table= Although the strike is prolonged, no exit is in sight. After the government declared the subcontracted union's dock occupation 'illegal' and urged its cessation the previous day, the union began a hunger strike.

The subcontractors' council and the union held three rounds of negotiations earlier this month but failed to even open the negotiation table after the 5th due to significant differences in views. The union argues that the 30% wage increase is "to realize low wages," stating, "The real wages of subcontracted workers have fallen by about 30% over the past five years, and they face economic difficulties as their wages are at minimum wage levels." The management side maintains that it cannot accept all the union's demands.

There are about 100 subcontractors within DSME, employing a total of 10,000 people. Approximately 120 subcontracted union members are participating in the strike. Although the negotiation parties are the labor and management of each subcontractor, the union emphasizes the role of the primary contractor DSME and its major shareholder, the Korea Development Bank. Their argument is that "since subcontractors operate by receiving progress payments from DSME, DSME must make decisions for wage increases and recognition of union activities to be possible." However, DSME and the Korea Development Bank find it difficult to intervene as it is a subcontractor labor-management issue. The primary contractor's involvement in wage negotiations could also violate the Subcontracting Act.

The Metalworkers' Union Geoje Tongyeong Goseong Shipbuilding Subcontracting Branch is occupying and protesting at Daewoo Shipbuilding & Marine Engineering Dock 1 in Geoje City, Gyeongnam Province on the afternoon of the 12th.
[Image source=Yonhap News]

As the strike prolongs, DSME management has taken a firm stance, urging the strike to end and calling for punishment of the union's illegal actions. On the 7th, DSME President Park Doo-sun held a press conference, saying, "With the shipbuilding boom returning after a long time, creating jobs, and revitalizing the local and national economy, I earnestly plead that this opportunity not be wasted due to illegal strikes," adding, "This could threaten the survival of the shipbuilding industry. We ask for the restoration of legal order regarding all illegal acts occurring in this national key industry."

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