Hanwha, Samsung face greater pressure to reduce migrant shipyard workforce

Byun Gwang-yong, fourth from right, then-Geoje mayoral candidate from the Democratic Party of Korea, announces his election pledge to prevent the increase in migrant shipyard workers during a press conference at Geoje City Hall, Feb. 25. Courtesy of Byun's election campaign office

Hanwha Ocean and Samsung Heavy Industries are facing the risk of a labor shortage as the newly elected mayor of Geoje pushes to reduce their reliance on migrant workers at shipyards on the island in South Gyeongsang Province.

Geoje Mayor Byun Gwang-yong, who won the April 2 by-election as the candidate from the liberal Democratic Party of Korea (DPK), has remained committed to supporting unionized Korean shipyard workers. These workers have repeatedly called on management to prioritize improving labor conditions rather than hiring low-paid foreign workers.

When the government decided late last year to allow migrant laborers to make up 30 percent of the full-time workforce at shipyards, Korean workers demanded that the quota be rolled back to the previous 20 percent.

“We need to reduce the number of migrant workers by rolling back the quota and hire more domestic workers instead,” Byun said last month during a debate with a rival candidate from the conservative People Power Party (PPP), which had been the ruling party until the ouster of former President Yoon Suk Yeol.

While adjusting the visa quota ultimately requires a decision from the central government, each municipality can request a special quota expansion. In this context, the new mayor’s stance may hinder ongoing efforts by shipyards on the island to secure enough labor to meet soaring global demand for vessels.

In contrast to Geoje’s city government, the Ulsan Metropolitan Government — led by PPP Mayor Kim Doo-gyeom — has asked the Ministry of Justice to grant a special visa quota expansion to secure migrant workers for HD Hyundai Heavy Industries' shipyard in the city.

Ulsan has also welcomed foreign workers, citing their role in slowing the city’s depopulation. Byun, on the other hand, argues that the heavy reliance on migrant labor has driven Korean workers away from Geoje.

“Korea’s shipbuilding industry is following the broader trend of hiring more foreign workers, just like other manufacturing sectors,” an insider from one of the Geoje-based shipbuilders said on condition of anonymity.

Hanwha Ocean and Samsung Heavy Industries may also see profit declines under the leadership of the new mayor, as he has asked them to contribute to a 200 billion won ($135 million) fund over the next five years to support the local community and Korean workers.

Byun said he plans to meet with the heads of both companies' shipyards to discuss the fundraising initiative. According to the mayor, the funds will be used for long-term projects such as incentivizing the hiring of Korean workers and supporting local small businesses.

However, the plan has also drawn criticism, with some concerned it may discourage future investments in the shipyards.

Both Hanwha Ocean and Samsung Heavy Industries declined to comment on Byun’s proposal.

Industry officials believe the outcome of the presidential election on June 3 will determine whether the mayor can follow through on his promises. Currently, Rep. Lee Jae-myung, who resigned as DPK chairman on Wednesday so he could declare his candidacy, is leading in the polls.