After a months-long stalemate, South Korean shipbuilders HD Hyundai Heavy Industries and Hanwha Ocean have finally reached a 2026 wage and collective bargaining agreement.
With an average pay raise of $30,300, HD Hyundai Heavy Industries Reaches a Wage Agreement
The HD Hyundai Heavy Industries Labor Union recently announced that the second 2026 wage and collective provisional agreement reached between labor and management was approved by a vote of all union members (a total of 8,193, of whom 7,724 participated in the vote), with a 55.1% approval rate.
This marks the conclusion of approximately five months of negotiations between labor and management at HD Hyundai Heavy Industries. Since the first round of negotiations began on June 2, the HD Hyundai Heavy Industries labor union has staged 11 partial strikes, and its union leader even climbed a 25-meter-high crane to stage a sit-in at a great height in an effort to pressure management.
The terms of the agreement approved this time include: a 120,000 won (approximately $87.98, including seniority pay) increase in the monthly base salary; a one-time bonus of 11.5 million won (approximately $8,431.80), plus 200% of the agreed-upon salary; and the issuance of 300,000 won (approximately $219.96) in welfare points, among other provisions. Compared to the first compensation proposal that was previously rejected, the new agreement adds a one-time bonus of 500,000 won and 300,000 won in welfare points, for a total increase in value of 800,000 won.
According to projections by the HD Hyundai Heavy Industries Labor Union and the South Korean shipbuilding industry, when factoring in base salary increases, one-time subsidies, and various bonuses, the average pay raise per union member this year will be 41.36 million won (approximately $30,325.15), an increase of 11.41 million won (approximately $8,365.81) from last year, marking a record high.
The HD Hyundai Heavy Industries labor union stated that the new agreement also addresses revisions to the collective bargaining provisions following the merger of HD Hyundai Heavy Industries and HD Hyundai Mipo, such as the decision by both parties to standardize practices according to HD Hyundai Heavy Industries’ standards.
Following the conclusion of the agreement, a representative from HD Hyundai Heavy Industries stated, “The new agreement lays the foundation for stable wage growth and performance-based compensation, while also substantially restructuring the collective agreement following the merger.”
Salary Negotiations for South Korea’s Three Largest Shipbuilders All Finalized for 2026
In addition to HD Hyundai Heavy Industries, labor and management at Hanwha Ocean have also reached a 2026 wage and collective bargaining agreement, which was narrowly approved with a 50.02% approval rate following a vote by union members (a total of 4,707 members, of whom 4,222 participated in the vote).
The new agreement includes: a monthly base salary increase of 140,000 won (approximately $102.65, including seniority pay); a one-time bonus of 8.5 million won (approximately $6,232.20); the issuance of 1 million won (approximately $733.20) in annual welfare points; increases to certain family support allowances; and provisions for the recruitment of new employees.
In addition, the new agreement stipulates that Hanwha Ocean’s labor and management representatives will establish a special task force (TF) by the end of the year to refine the performance bonus system and clarify the criteria for distributing operational performance bonuses and strategic performance bonuses. The agreement also provides that union members who have reached retirement age will be rehired as contract production workers for one year, with the possibility of a one-year extension following a subsequent review.
It is worth noting that the agreement passed by the Hanwha Ocean union addresses only the demands of direct employees; negotiations between the shipbuilder and the subcontractors’ union have yet to be concluded.
This year, Samsung Heavy Industries became the first of South Korea’s three major shipbuilding giants to reach a 2026 wage and collective bargaining agreement, finalizing it before the Chuseok holiday.
The terms of the agreement with Samsung Heavy Industries include: a 5.2% increase in the monthly base salary (approximately 131,800 won, or about $96.64, including seniority-based raises); the payment of a 7 million won (approximately $5,132.40) incentive bonus; management has agreed to adjust the calculation rules for the Over-Profit Incentive (OPI), changing the rate from the previously stipulated 20% of excess profit to 10% of operating profit. This means Samsung Heavy Industries has revised its bonus mechanism to be tied to operating profit.
South Korean media reported that, as the three major shipbuilding giants have successively resolved their labor-management disputes, the risk of “production disruptions”—which had previously been a concern for the South Korean shipbuilding industry—has been averted, and the three shipbuilders plan to focus their efforts on competing for global orders.
On November 4, 2023, Waigaoqiao Shipbuilding successfully delivered China’s first domestically built large cruise ship, the “Adora Magic City,” making China the fifth country in the world—after Germany, France, Italy, and Finland—to possess the capability to build large cruise ships.