[Report] Geoje Turned Ghost Town "Company Must Survive to Raise Wages"

From Labor-Management Conflict to Intra-Labor Dispute
Nearby Commercial Area Devastated by Strike
"Subcontracted Workers and Sense of Colleague Urgently Needed"

Four Failed Negotiations Between Subcontracted Labor and Management
Wage Increase Rates Near Agreement
Disputes Over Compensation and Employment Succession

Nearby Businesses Struggling Due to Strike
"Mutual Wounds Deep, Recovery Will Take Time"

San-eun Official Warns "If Prolonged, Will File for Rehabilitation"
Warns No Additional Support If Financial Difficulties Arise

Amid extreme confrontation between labor and management due to the dock occupation protest by the Daewoo Shipbuilding & Marine Engineering Geoje Tongyeong Goseong Shipbuilding Subcontractors' Union, the dining alley near the shipyard appeared quiet on the evening of the 21st. Photo by Jeong Donghoon

[Asia Economy (Geoje) = Reporter Jeong Dong-hoon] "The company has to survive for wages to increase. We are all workers working together... I really feel resentful and frustrated."

On the evening of the 21st, Seo (39), a production worker at Daewoo Shipbuilding & Marine Engineering (DSME) near Okpo Shipyard in Geoje, Gyeongnam, sighed deeply as he expressed his frustration. While emphasizing solidarity with subcontracted workers, he raised his voice over concerns of mutual destruction due to the strike.

He said, "Even the primary contractor employees haven't seen wage increases for 5 to 6 years," adding, "Now that the workload is slightly increasing and more manpower is needed, if work is stopped like this, who will take responsibility for the damages?" he lamented.

Geoje, the birthplace of shipbuilding, turned into a 'ghost town'... Tension rises at the dock where 'public authority intervention' is being discussed

In fact, the commercial areas around Ajoo-dong and Okpo-dong, surrounding the Okpo Shipyard, have been devastated since the strike began. Although some workers gathered in small groups to have dinner, there was no sound of lively laughter or even the usual music from shops. A local business owner likened Geoje, once called the cradle of shipbuilding, to a 'ghost town.'

At Okpo Shipyard's 1 Dock (shipbuilding yard), where seven members of the Korean Metal Workers' Union (KMWU) Geoje-Tongyeong-Goseong Shipbuilding Subcontractors Branch of the Korean Confederation of Trade Unions (KCTU) are conducting an occupation protest, tension was palpable. Yoo Choi-han, the vice-chairman of the subcontractors' branch, was confined inside a 1 cubic meter steel structure on the ship's bottom surface, surrounded by six other workers continuing the protest. Around the 1 Dock occupied by the seven members, dozens of workers are guarding the protest site in shifts day and night.

Seven members of the Daewoo Shipbuilding & Marine Engineering Geoje Tongyeong Goseong Shipbuilding Subcontractors Union were having a meal on the afternoon of the 21st while occupying an oil tanker under construction in Dock 1 at Daewoo Shipbuilding Okpo Shipyard in Geoje, Gyeongnam. Photo by Jeong Donghoon

Under sweltering weather exceeding 30 degrees Celsius during the day and heavy rains during the monsoon season, the expressions and voices of the union members continuing the occupation protest for 35 days since the 18th of last month showed fatigue. After the government declared this strike illegal and hinted at deploying public authority, the police presence at the site has increased to hundreds. The site structure suggests that even if police dispersal is executed, physical clashes seem inevitable. To approach the union members occupying the crude oil tanker across the dock, which is several tens of meters deep, one must pass narrow railings and stairs. The protesters have prepared flammable materials such as thinner, raising concerns about physical confrontations.

Subcontractor labor and management failed to reach agreement despite four negotiations the previous day... Management reluctant to drop "claims for strike damages"

Meanwhile, subcontractor labor and management failed to reach an agreement despite four negotiation sessions the previous day. Negotiations continued again on the morning of the 22nd. Initially on parallel tracks, the parties reportedly reached consensus on wage increase rates. Remaining issues include claims for damages and employment succession for union members belonging to subcontractors who have closed down. The union particularly demanded the withdrawal of plans to file lawsuits for damages related to strike actions, but management maintains it cannot accept this as some partner companies intend to pursue litigation. During the previous day's negotiations, the union demanded the withdrawal of damage claims related to strike actions separately from wage increase demands, but management opposed, citing some partner companies' intentions to sue.

Time for negotiations between subcontractor labor and management is running out. From the 23rd, the entire shipyard enters the vacation period. If negotiations are not concluded that day, both sides will inevitably fall into the 'quagmire' of prolonged strikes. Like the subcontractors' branch, the Daewoo Shipbuilding branch, also part of the KMWU under KCTU, is concluding a vote on whether to withdraw from the Metal Workers' Union on that day. As of the previous day, over 60% of union members had already voted.

Jung Jeong-gi, the owner of a Japanese restaurant near Daewoo Shipbuilding & Marine Engineering Okpo Shipyard in Geoje, Gyeongnam, is organizing chairs at empty tables. Jung lamented that even common company dinners have completely stopped since the Daewoo Shipbuilding strike. Photo by Jung Dong-hoon

The commercial districts near Okpo Shipyard are staggering after the strike. Merchants near Okpo-dong and Ajoo-dong lamented that the strike piled on top of the reduced customers due to the COVID-19 spread. Banners stating "Long-term strike situation destroys the local economy" were hung in various places, and some shops had their shutters down. Jeong Jeong-gi, owner of a Japanese restaurant in Ajoo-dong, said, "Sales have dropped by more than 50% compared to two months before the strike started." At 7:30 p.m., when dinner was in full swing, the restaurant with over 30 seats had only two customers. Jeong sighed, "As work decreased, many employees leave from 3 p.m. Due to the prolonged strike, the atmosphere inside the shipyard has become harsh, so not only company dinners but also family dining out has disappeared." Choi, who runs a chicken restaurant near Okpo-dong, said, "It's been two months since people who suffer together (primary and subcontracted workers) split and fought. The wounds they inflicted on each other are so deep that it will take time to overcome," shaking his head.

A warning has come from creditor banks that if the subcontractor union's strike at Daewoo Shipbuilding & Marine Engineering prolongs, DSME may have no choice but to proceed with rehabilitation procedures. An official from the Korea Development Bank, the main creditor bank of DSME, said, "If the subcontractor union's strike at DSME prolongs, there may be problems with normal repayment of principal and interest on debts," adding, "The creditor group’s basic principle is that it cannot provide additional support for financial difficulties caused by operational disruptions."

On the afternoon of the 21st, the 50th day of the subcontractor strike at Daewoo Shipbuilding & Marine Engineering, Hong Ji-wook, Vice Chairman of the Metal Workers' Union (right), and Lee Kim Chun-taek, Secretary of the Shipbuilding Subcontractors' Branch, were touching their heads as the meeting was adjourned while negotiating with representatives of partner companies at Daewoo Shipbuilding & Marine Engineering Okpo Shipyard in Geoje-si, Gyeongnam.
[Photo by Yonhap News]

This is interpreted as a 'warning message' that if DSME faces financial difficulties due to the prolonged strike, it will not be able to receive additional financial support under creditor group management as before. If the creditor group refuses DSME's request for financial support, DSME will have no choice but to apply for rehabilitation procedures in court. The court compares the going-concern value and liquidation value and initiates rehabilitation procedures if it judges that the value of continuing the business is greater than that of liquidation. However, many view the possibility of DSME undergoing liquidation procedures as more likely.

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