Following wage negotiations concluded by Samsung Heavy Industries and Hanwha Ocean, the HD Hyundai Heavy Industries Union finally won the second temporary agreement in this year’s wage negotiations through fierce strike protests.
Yonhap News Agency reports that labor and management at HD Hyundai Heavy Industries reached a second tentative agreement on September 17 regarding this year’s wage negotiations. This outcome follows 57 days of arduous negotiations after the initial tentative agreement was rejected. The union will vote on the second tentative agreement on the 19th. If approved, HD Hyundai Heavy Industries’ labor-management negotiations for this year will officially conclude.
During the 25th round of labor-management negotiations at HD Hyundai Heavy Industries, the two sides reached a second interim agreement, which included a base salary increase of 135,000 won (approximately US$97.74, including a 35,000 won promotion based on seniority), an incentive payment of 6.4 million won (approximately US$4,633.60), a special allowance (100% of the agreed salary), and performance bonuses.
The tentative agreement proposed a base wage increase of 133,000 won (approximately US$96.29, including a 35,000 won seniority-based raise) and a 5.2 million won incentive payment (approximately US$3,764.80). In contrast, the second tentative agreement raised the base wage by 2,000 won (approximately US$1.45) and increased the incentive bonus by 1.2 million won (approximately US$868.80).
HD Hyundai Heavy Industries stated that when combining the base wage increase with incentive payments and performance bonuses, each employee will receive an average salary increase of 28.3 million won (approximately US$20,489.20). This base wage hike and one-time bonus package represent the highest-ever proposal in the company’s history, positioning it “at the top tier within the industry.”
Regarding the merger, labor and management at HD Hyundai Heavy Industries have agreed in a second provisional agreement to sign an employment stability agreement in support of the merger process between HD Hyundai Heavy Industries and HD Hyundai Mipo Dockyard.
HD Hyundai Heavy Industries reportedly reached its first tentative agreement on July 18, but it was rejected by a 63.8% vote at a union members’ meeting on July 22. Since then, the two sides have maintained dialogue through irregular work consultations and twice-weekly negotiations, but have been unable to reach a consensus on issues such as the additional wage increase and the implementation method.
During the negotiations, HD Hyundai announced the merger of “HD Hyundai Heavy Industries and HD Hyundai Mipo Dockyard”. However, new conflicts emerged, such as potential job relocation issues following the merger and anticipated profit distribution disputes after the establishment of the Singapore legal entity, leading to a continuous increase in labor-management dispute points.
In response, the head of the HD Hyundai Heavy Industries union climbed a 40-meter-high crane at the Ulsan shipyard on September 10 to stage a high-altitude protest. The union launched an indefinite strike starting September 11, vowing to continue until management presents a substantive negotiation proposal.
In response, the head of the HD Hyundai Heavy Industries union climbed a 40-meter-high crane at the Ulsan Shipyard to protest from above on September 10. The union will go on an indefinite strike starting from the 11th until the management proposes a positive negotiation plan.
An official from Hyundai Heavy Industries stated: “Labor and management have reached a second provisional agreement under challenging circumstances. We anticipate that this industry-leading agreement will serve as a driving force to enhance global competitiveness and spearhead regional social development.”
For South Korea’s three major shipbuilders, negotiations this year have been particularly challenging for HD Hyundai Heavy Industries, as Samsung Heavy Industries and Hanwha Ocean have already reached agreements earlier.
The agreement reached by Samsung Heavy Industries includes: an average base wage increase of 133,196 won (approximately US$96.54); a labor-management harmony bonus of 5 million won (approximately US$3,624.00); and an increase in welfare points of 1 million won (approximately $724.80, a 100,000 won increase from last year).
Hanwha Ocean’s agreement includes the following key terms: a base wage increase of 132,620 won (approximately US$89.24, including 23,262 won for seniority-based promotions), and a one-time bonus payment of 5.2 million won (approximately US$3,764.80).
Notably, Hanwha Ocean’s wage agreement is seen as the beginning of a structural transformation in the overall compensation system of South Korea’s shipbuilding industry, characterized by the introduction of a job-difficulty-based pay system and a substantial increase in wages driven by base salary.