"Jeon Jae-su's Claims of HMM Relocation Impact Exaggerated"... Park Hyungjoon Camp Criticizes as 'Election-Oriented'

Shipping Industry Fears “Partial Relocation” and “Ghost Headquarters”

Park’s Camp Criticizes HMM Labor-Management Agreement as a Hastily Arranged Event

As debates over the economic impact of relocating HMM’s headquarters to Busan have emerged as a key issue in the June 3rd local elections, both the political sphere and the shipping industry are raising concerns that the economic benefits have been significantly exaggerated. Some are also suggesting the possibility of a “partial relocation” without the transfer of core functions.

According to the shipping industry on May 11, HMM held an extraordinary general meeting of shareholders on May 8 and passed an amendment to its articles of incorporation to change its headquarters location to Busan. Previously, HMM labor and management reached an agreement on April 30 to relocate the headquarters to Busan.

Jeon Jae-su, the Democratic Party of Korea’s candidate for Busan mayor, held an emergency press conference on May 8, stating, “The economic map of Busan will be completely transformed,” and described the move as “bringing the heart of Korean shipping back to the vicinity of Busan Port.”

Jeon Jae-su, the Democratic Party of Korea's candidate for Busan mayor, is greeting at the campaign office opening ceremony on the afternoon of the 9th.
[Image Source=Yonhap News]

Jeon explained that if HMM relocates to Busan, together with SK Shipping and H-Line Shipping, Busan would establish a “three major shipping companies system.” The combined sales of these three companies amount to 14 trillion won, with 4,500 executives and employees.

Jeon’s camp argued that the relocation of HMM alone is expected to generate 7.7 trillion won in induced production, 3 trillion won in added value, and 16,000 new jobs over the next five years. If the scope is broadened to include all three major shipping companies, the effect could reach 10 trillion won in induced production and 22,000 jobs created.

On the other hand, voices inside and outside the shipping industry emphasize that the actual economic impact depends on whether core organizations and decision-making functions are relocated. If only the headquarters address is changed, the ripple effect on the local economy could be limited.

Within the industry, there are also observations that key departments such as sales and finance may remain in Seoul. As a result, some in the political sphere have criticized the move as creating a “ghost headquarters” or a “relocation in name only.”

Cho Seunghwan, a People Power Party lawmaker and former Minister of Oceans and Fisheries, said, “This is more like an agreement to leave a ghost headquarters in Busan,” and added, “There are concerns that this is a hastily arranged political event ahead of the June 3rd local elections.”

Cho also contended that “the term ‘autonomous agreement between labor and management’ is not accurate.” HMM is more than 70% owned by government-related entities, with Korea Development Bank and Korea Ocean Business Corporation holding 35.42% and 35.08% stakes, respectively. Korea Development Bank itself is majority-owned by the Ministry of Economy and Finance.

He stated, “Given that the government effectively exercises influence, it is difficult to view this as a purely autonomous decision between labor and management.”

There have also been criticisms that the agreement lacks specificity. Key details such as the timing of the relocation, the number of personnel to be transferred to Busan, plans for building a new North Port office, budget, and construction start date have not been disclosed.

Candidates for the People Power Party's mayoral elections in the Yeongnam region held a press conference on the 6th at the Ulsan City Hall press center to condemn the Democratic Party's special prosecution law on dismissal of prosecution, during which Busan mayoral candidate Hyungjoon Park is speaking.
[Image source=Yonhap News]

It is also known that support measures from the Ministry of Oceans and Fisheries and the Busan Metropolitan Government are still in the early stages of discussion. There are also projections that securing and executing the actual budget could take a considerable amount of time.

The camp of Hyungjoon Park, the People Power Party’s candidate for Busan mayor, immediately released a statement titled “Is HMM’s Relocation for Busan or for the Election?” criticizing, “The agreement lacks substance” and calling it an “election-oriented event.”

Stakeholders in the shipping industry unanimously stated, “The real impact on the local economy depends on how many core staff members and functions are actually relocated to Busan,” and added, “There needs to be a concrete implementation plan and support measures that go beyond political declarations.”

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