Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
HD Hyundai's merger plan spurs union protest threatening US shipbuilding project
Unionized workers at HD Hyundai Heavy Industries (HHI) hold a rally at the company's shipyard in Ulsan, Friday. Courtesy of HD HHI union
By Park Jae-hyuk
'Yellow envelope law' fuels labor disputes over business decisions
HD Hyundai's plan to merge its two shipbuilding subsidiaries has sparked fierce opposition from unionized shipyard workers at both companies, raising concerns that it may cause major setbacks for cooperation between Korea and the United States in shipbuilding.
The backlash has intensified with the National Assembly’s recent amendments to the Trade Union and Labor Relations Adjustment Act, which allow labor disputes to cover business decisions with significant impacts on workplace conditions. Better known as the “yellow envelope law,” the new amendments legitimize worker protests against restructuring and other business decisions, and prohibit companies from seeking compensation for damage related to strikes.
Two days after Wednesday’s announcement of the planned integration of HD Hyundai Heavy Industries (HHI) and HD Hyundai Mipo, workers put down their tools for four hours, warning of another three-day strike beginning Tuesday.
They condemned management for announcing the merger without prior notice and voiced concerns over the possible redeployment of employees or layoffs of those in overlapping positions.
“The company has refused our request to guarantee job security through a binding agreement,” the HD HHI union said in a statement.
On Thursday, Kim Jong-hoon, head of Ulsan’s Dong District — home to HD HHI and HD Hyundai Mipo — called on the companies to ensure continued employment for all workers after the merger.
“I strongly urge them to take responsible action, so local workers do not experience job insecurity due to restructuring or reassignment during the integration process,” he said.
According to HD Hyundai, the merger aims to give the company a competitive edge as the government pursues a $150 billion investment in the “Make American Shipbuilding Great Again” project, agreed to during Korea-U.S. tariff talks in July.
HD Hyundai has already joined the project by partnering with Korea Development Bank and Cerberus Capital to establish a multibillion-dollar joint investment fund.
With HD HHI's proven record in naval exports and HD Hyundai Mipo’s docks and facilities suited for warship construction, the combined entity is expected to boost its capacity for maintaining, repairing and overhauling U.S. naval vessels, while constructing warships for various nations.
“With the merger, we will increase market share and secure advanced technologies,” HD Hyundai said in a statement.
HD Hyundai’s labor unrest is also seen as a sign that similar disputes may erupt across other sectors once the pro-labor revisions to the Trade Union Act take effect next year.
In the auto industry, Hyundai Motor’s union has already voted to refuse overtime and weekend work after the company rejected demands for a base monthly wage hike of 141,300 won ($101) and a 30 percent net profit bonus. Last month, unionized subcontracted workers at Hyundai Steel's facilities in South Chungcheong Province filed suits against three executives over alleged unfair labor practices.