Unionized workers at HMM are clashing with management over wage increases, as the shipping company’s 2021 operating profit is expected to reach 5 trillion won. The state-run Korea Development Bank (KDB), which is HMM’s main creditor, opposes an increase in wages.
The local shipping industry has suffered from a recession for almost a decade, which led to a wage freeze at HMM for the past eight years. The union says it accepted the freeze as the company was struggling to stay afloat; but now with record-breaking sales, it argues that the company needs to boost salaries to compensate for the wage freeze. Some industry watchers believe hiking pay could enhance employee morale.
According to industry sources, representatives of HMM’s union held a third round of wage talks with management officials, Wednesday, but failed to make progress. The fourth meeting is scheduled for Aug. 11, but if the two parties fail to reach an agreement, the union plans to turn to the Central Labor Relations Committee (CLRC) for mediation before launching a strike. HMM’s office worker union has already turned to the CLRC. If an agreement with management is not reached by Aug. 19, the union plans put the strike to a vote.
At the crux of the conflict is the rate of increase in wages.
HMM’s union is requesting management to increase employee wages by 25 percent this year to compensate for the prolonged wage freeze. However, the management has proposed only a 5.5 percent increase, which is far short of not only the union’s request, but also a wage hike plan proposed by an outside consulting firm that recommended 11.8 percent.
“We will not accept a proposal that even falls short of a proposal from outside consultants,” the union said.
HMM posted an earnings surprise for the first half of the year. Its first-quarter operating profit reached 1.2 trillion won, and rose to 1.4 trillion in the second quarter. Many analysts predict HMM could achieve close to 5 trillion won in operating profit for the entire year. Due to a global shipping boom, HMM’s stock price also surged nearly 10 fold compare to early last year.
Despite the boom, HMM employees say they have not reaped any benefits.
As off 2019, HMM’s office workers had seen their wages frozen for eight years and its seamen, six years. Last year, only after a strike settlement, workers were given a 2.8 percent increase. According to the union, the 25 percent hike will only cost the shipping company 120 billion won, which it says is a mere fraction of the latest earnings and an acceptable reward for years of frozen wages.
Source: The Korea Times