HD Hyundai Heavy Industries union secures strike mandate over profit-sharing demand

The union at HD Hyundai Heavy Industries, which is demanding that at least 30 percent of the company's operating profit be set aside as a performance bonus pool, has secured the legal right to strike. The union is expected to discuss whether and when to launch industrial action. Tension is rising across South Korea's shipbuilding industry as the country's largest shipbuilder moves closer to a work stoppage.

The union conducted a strike authorization vote from Tuesday through Thursday among 8,127 members, including those from the Mipo committee. Of the 5,607 members who cast ballots, 5,379 voted in favor — a 66.18 percent approval rate based on total membership. There were 219 votes against and nine abstentions.

The Hyundai Construction Machinery chapter also held its vote: 1,154 of 1,363 eligible members participated, with 999 voting in favor. At the Hyundai Electric chapter, 412 of 577 eligible members voted, and 399 supported the motion. Across all chapters and the Mipo committee, total eligible membership stands at 10,067. Of those, 7,173 members — 71.25 percent — cast ballots, and 67.32 percent of the full membership voted in favor.

To legally authorize a strike, a union must obtain a mediation suspension ruling from the National Labor Relations Commission and pass an internal strike authorization vote. The three unions jointly filed for labor dispute mediation with the commission on Aug. 14. After two mediation sessions, the commission ruled Monday that the gap between the two sides was too wide and suspended mediation. With the authorization vote now passed, the unions have met all legal requirements for a strike and other forms of industrial action.

The union is expected to convene its central strike committee Friday to deliberate on whether to strike and set a timeline. The union has demanded a monthly base pay increase of 149,600 won ($108) and a 100 percent raise in bonuses, but management has yet to table a counterproposal. This is the first time the HD Hyundai Heavy Industries union has demanded that a fixed percentage of operating profit be shared with workers. The HD Hyundai Samho union has also called for 30 percent of operating profit to be allocated as a performance bonus pool.

The union argues that workers who endured years of prolonged industry downturn deserve to share in the current shipbuilding boom. HD Hyundai Heavy Industries posted operating profit of 2.04 trillion won last year, and in the second quarter of this year recorded quarterly operating profit of 1.04 trillion won — surpassing 1 trillion won in a single quarter for the first time in the company's history. Management, however, views the demand as difficult to accept given market volatility and investment obligations. If the minimum 30 percent profit-sharing formula were applied, HD Hyundai Heavy Industries and HD Hyundai Samho together would need to set aside around 1 trillion won for bonuses.

Rather than launching an immediate all-out strike, the union is expected to keep negotiating. Management and the union held their 17th round of formal talks Thursday — the final day of the strike vote — and plan to sit down again for an 18th round Tuesday. Starting next month, the two sides are also set to increase the frequency of talks from twice to three times a week. If Tuesday's session also breaks down, however, the union is seen as likely to begin a partial strike to ratchet up pressure on management. Should intensive negotiations continue to stall, observers say a full general strike cannot be ruled out.