The Korea Herald


Yoon hints at hardline response to workers’ DSME shipyard occupation

Yoon says he ‘waited long enough,’ vows stern response to ‘illegal’ actions

By Ko Jun-tae

Published : July 19, 2022 - 13:49

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View of a shipyard in Geoje, South Gyeongsang Province, run by Daewoo Shipbuilding & Marine Engineering on Monday (Yonhap) View of a shipyard in Geoje, South Gyeongsang Province, run by Daewoo Shipbuilding & Marine Engineering on Monday (Yonhap)
South Korean President Yoon Suk-yeol on Tuesday demanded strong response from law enforcement and government agencies to collective action by unionists at shipbuilder Daewoo Shipbuilding & Marine Engineering.

Yoon said in a Cabinet meeting Tuesday that his administration would sternly respond “illegal and threatening” action by subcontracted workers at DSME, as its impact on the shipbuilding industry and greater economy is “tremendous.”

Striking subcontractors have occupied DSME’s largest shipyard in Geoje, South Gyeongsang Province, for nearly 50 days, demanding a 30 percent pay increase. The company said they also destroyed some equipment there.

“The people won’t be willing to tolerate using illegal and threatening means (for collective action),” the president said. “Rule of law must be strictly imposed at industrial sites, whether that be on employers or laborers.”

He also hinted in a regular meeting with reporters Tuesday that the government could use force to break up the continuing occupation.

“When it comes to industrial sites and labor-management relations, illegal actions by either one of them shouldn’t be left unattended or tolerated,” he said. “Besides, I think the people and the government have all waited long enough.”

Yoon’s comments came as workers’ seizure of the shipyard paralyzed DSME’s production and delayed delivery of new vessels.

The striking workers are demanding a pay raise as the company shows signs of rebounding, with orders increasing amid military conflict between Russia and Ukraine. Their pay has been frozen since a 30 percent cut in 2016 when the shipbuilder was in financial distress.

The strike and occupation have been supported by the Korean Confederation of Trade Unions, one of the two largest umbrella labor groups in South Korea.

The occupation has delayed the delivery of 12 ships so far the company said, adding that it expects construction schedules of up to 30 vessels to be affected by next month’s end. DSME said it has so far incurred more than 600 billion won in losses and is taking in additional damage of more than 26 billion won per day.

The company said the strike could force it to scrap shipbuilding contracts in place and pressure the company to pay compensation of up to 50 billion won to its clients if the strike continues through the end of next month.

The shipbuilder swung to a net loss last year for the first time since 2016 as the amount of new ship orders fell due to the persisting COVID-19 pandemic. DSME’s net loss reached 1.7 trillion won in 2021 from sales plunging 36 percent on-year to 4.5 trillion won.

Prime Minister Han Duck-soo on Monday convened an emergency meeting with five ministers to discuss ways to respond to the strike, warning that the subcontract workers on strike could face criminal punishment and be held accountable for financial damage inflicted on the shipbuilder.

Gyeongnam Provincial Police Agency announced Monday that it would dispatch more police officers to DSME’s shipyard, ordering extensive investigations into any potentially illegal actions taken by workers on strike. Inspection will also ensue to identify safety problems caused by workers installing barricades and otehr equipment as part of their collective action.

Interior Minister Lee Sang-min and Yoon Hee Keun, the president’s pick to head the National Policy Agency, were scheduled to monitor the scene Tuesday.

While some have expressed concerns that law enforcement officials will be physically dispatched to put an end to the occupation, police insiders believe chances are low for the time being, as the workers are still in talks with the shipbuilder over their demands.

The ruling People Power Party strongly denounced the collective action, saying the general public is no longer willing to yield to illegal and violent actions coming from labor unions.

“Most of the people are reluctant to support hardline actions from the KCTU, which does not shy away from illegal violence,” Rep. Kweon Seong-dong, floor leader and acting chairman of the People Power Party, said in a party meeting Tuesday.

“As President Yoon Suk-yeol emphasized yesterday, illegal actions must come to an end while legally upright actions are supported.”

The main opposition Democratic Party of Korea asked the government to reconsidering using force to stop the collective action, saying the president must consider first whether the workers on strike have been paid fair wages. The party added it will assemble a special task force to look into the case.

“Workers have to be provided with enough wages for industrial competitiveness, and this case should not be viewed simply as a conflict between employer and laborers,” Rep. Lee Soo-jin, a spokesperson for the Democratic Party told reporters Tuesday.

“There are big problems with the employer, which has been under the control of state-run Korea Development Bank.”

The state-run financial institute has been controlling around 55 percent of DSME after the shipbuilder fell under financial trouble in 2016 during an overall downturn in the shipbuilding industry. At the time, DSME laid off some 70,000 employees and cut the salaries of the remaining workers.

The Democratic Party pointed out that the compensation for DSME’s directly employed and subcontract workers have remained largely unchanged since then, which the party argues must be considered before physically dispatching the police to the strike scene.